IRS rules that eyeglasses, contact lenses are not taxable

December 26, 2012

The Internal Revenue Service (IRS) has ruled that eyeglasses and contact lenses are exempted from the medical device excise tax that will take affect on Jan. 1, 2013.

Washington, DC-The Internal Revenue Service (IRS) has ruled that eyeglasses and contact lenses are exempted from the medical device excise tax that will take affect on Jan. 1, 2013.

The IRS, in its final ruling on the excise tax earlier this month, outlined the regulations and definitions as to what medical devices would be taxed under the Health Care and Education Reconciliation Act of 2010 in conjunction with the Patient Protection and Affordable Care Act.

Within the 58-page document, the IRS cites the “retail exemption” (Section 4191 [b][2]) clause, which states that “the term ‘taxable medical device’ does not include eyeglasses, contact lenses, hearing aids, and any other medical device determined by the Secretary to be of a type that is generally purchased by the general public at retail for individual use.”

Under the proposed regulations, a device is considered to be non-taxable when the medical device is purchased by the general public “at retail for individual use” if the device is regularly available for purchase and used by consumers who are not medical professionals, and if the device’s design is not intended for use in a medical institution, office, or by medical professionals.

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