The IRS released final regulations relating to the excise tax imposed on certain sales by manufacturers, producers, or importers of designated drugs. Specifically, the final regulations set forth procedural provisions relating to how taxpayers must report liability for such tax. The final regulations also except such tax from semimonthly deposit requirements. The final regulations affect manufacturers, producers, or importers of designated drugs dispensed, furnished, or administered to individuals under the terms of Medicare during certain statutory periods. The proposed regulations (NPRM REG-115559-23) were published on October 2, 2023. After consideration of the public comments, the regulations finalized by the IRS adopt the proposed regulations with three non-substantive modifications. Specifically, the final regulations modify proposed §§40.0-1, 40.6011-1(d), and 40.6302(c)-1 by clarifying that the Code Sec. 5000D tax is imposed on “the sale of” designated drugs. The language, as modified, more closely tracks the language of Code Sec. 5000D(a).

Applicability Dates

The final regulations, which are effective on August 16, 2024, generally apply to calendar quarters beginning on or after October 1, 2023. For rules that apply before October 1, 2023, see 26 CFR part 40, revised as of April 1, 2024.