What is the medical device tax?

The medical device tax is an excise tax on the sale of certain medical devices by the manufacturer and the importer of the devices. The tax is 2.3 percent of the total price of the device.

This tax became effective December 31, 2012, requiring all importers and manufacturers to report and pay the medical device tax. Manufacturers are required to use Form 720 to report taxes on medical devices. Individual consumers have no obligation as far as the tax is concerned. The tax has received many criticisms since it became effective. People claim that the damage caused by the tax will outweigh any benefits.