MDET Subject to Tax When Passed Through in Washington

Friday, November 9th, 2012

 
 
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Washington
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In Washington, the federal Medical Device Excise Tax (MDET) is subject to sales tax when it is passed on to a buyer. On November 6, the Washington Department of Revenue issued a special notice on the MDET and Washington sales taxes. Wash. Spec. Notice: Federal Excise Tax on Medical Devices (Dept. of Revenue Nov. 6, 2012).

Washington bases its sales tax on a taxable item's "sales price," which is the total amount of consideration for which tangible personal property is sold, leased, rented, or valued. No deduction is allowed for costs imposed on the seller, including taxes. The MDET is a federal excise tax imposed on the manufacturer, so Washington considers it a cost imposed on the seller that must be included in the selling price. Therefore, even when it is passed on to the buyer, the MDET is part of the selling price of a medical device. This means that the MDET is taxable as long as the underlying sale of the medical device is taxable, regardless of whether the MDET is separately stated.


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TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

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