Cabela’s Takes a Stand on Medical Excise Tax on Sporting Goods-Fiction!
Summary of eRumor:
Those who purchase hunting and fishing gear at Cabela’s (and other retailers) now have to pay a medical excise tax established under Obamacare, according to social media posts.
The Truth:
Obamacare’s medical excise tax doesn’t apply to sporting goods, and Cabela’s isn’t applying it to transactions there.
The rumor started with a social media post that showed a Cabela’s receipt with a $5.82 charge for what’s identified as a “medical excise tax” back in 2013. According to the post, the 2.3% medical excise tax was supposed to be “hidden” from customers, but Cabela’s had taken a stand by including the charge as a separate line item on receipts.
But Obamacare’s medical excise tax does not apply to sporting goods. Cabela’s mistakenly included the surcharge on customer receipts for one day — January 1, 2013 — and issued refunds to customers within a week.
Joe Arterburn, a Cabela’s spokesperson, said that the 2.3% medical excise tax was applied to customer transactions because of a “glitch in the system.” Aterburn said the mistake came to light when customers notified the company that the medical excise tax surcharge had appeared on their sales receipts.
The medical excise tax was established under Obamacare to help supplement the cost of providing insurance to the uninsured. Medical professionals pay the excise tax when they purchase medical devices defined under the Federal Food, Drug and Cosmetic Act (FFDCA):
Medical devices range from simple tongue depressors and bedpans to complex programmable pacemakers with micro-chip technology and laser surgical devices. In addition, medical devices include in vitro diagnostic products, such as general purpose lab equipment, reagents, and test kits, which may include monoclonal antibody technology. Certain electronic radiation emitting products with medical application and claims meet the definition of medical device. Examples include diagnostic ultrasound products, x-ray machines and medical lasers. If a product is labeled, promoted or used in a manner that meets the following definition in section 201(h) of the Federal Food Drug & Cosmetic (FD&C) Act it will be regulated by the Food and Drug Administration (FDA)as a medical device and is subject to premarketing and postmarketing regulatory controls.
So, the medical excise tax does not apply to sporting goods, and consumers do not directly pay it.
There are excise taxes on sporting goods, but they aren’t new and they weren’t established under the Affordable Care Act. These pre-existing taxes on manufacturers for things like fishing poles, tackle boxes, outboard motors and bows are defined under IRS Publication 510, which is not the same as the medical excise tax.