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January 31, 2013
We have received a significant number of queries from our customers regarding whether our hand protection products (i.e., disposable single use examination and industrial grade gloves) are subject to the 2.3% excise tax on medical devices which was imposed effective January 1, 2013 by Section 4191 of the Internal Revenue Code of 1986, as amended (the “Medical Device Excise Tax” or “MDET”), which was enacted as part of the Health Care and Education Reconciliation Act of 2010 in conjunction with the Patient Protection and Affordable Care Act (also passed in 2010)(collectively, the “Enacting Laws”).

We have studied the Enacting Laws, along with all subsequently-issued applicable notices of proposed rule making and interim guidance notices, and the final regulations issued by the Internal Revenue Service and the Treasury Department under TD 9604 dated December 7, 2012 (collectively with the Enacting Laws, the “Applicable Rules”). Based on our interpretation of the Applicable Rules and independent advice and counsel, it is our firm position that all of the glove products that we sell fall under the so-called “retail exemption” of the Applicable Rules and are therefore exempt from the MDET. Accordingly, our current product prices do not include any charges for pass-through or recovery of the MDET, and no such charges are contemplated in the future barring any change in the Applicable Rules and/or the interpretation thereof.

This is Sempermed’s position. If you should have any questions about the MDET and its applicability to our products or any other medical product, we recommend that you consult with your tax counsel.

If you have any questions or concerns, please contact your Sempermed representative or call 800-366-9545.