As part of health care reform law, medical devices now have an excise tax. The tax is 2.3 percent of the sale price of the device. The law goes into effect on January 1, 2012. The IRS has issued some clarification on what is a taxable device.

The IRS has defined a device as taxable if "under the Federal Food, Drug & Cosmetic Act of 206 as an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, that is recognized in the official National Formulary, or the United States Pharmacopeia, or any supplement to them; intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease; or intended to affect the structure or any function of the body, and that does not achieve its primary intended purposes through chemical action within or on the body and that is not dependent upon being metabolized for the achievement of its primary intended purposes."

The FDA has listed around 1,700 devices that fit the generic definition. There is an exception for eyeglasses, contact lenses, hearing aids. This also applies to devices that are purchased by the general public at retail establishments.