- The IRS and Treasury Department have proposed regulations (REG-115559-23) that outline how to report the excise tax imposed on manufacturers, producers, or importers of designated drugs under IRC Section 5000D.
- The proposed regulations would require taxpayers to report the tax on Form 720 and file it quarterly.
- The regulations would not require semimonthly deposits of the tax. They would apply to calendar quarters starting from October 1, 2023.
- Taxpayers can rely on the regulations for returns from that date. The proposed regulations also introduce a new Part 47 to contain the “Designated Drugs Excise Tax Regulations.” Taxpayers affected by these regulations should review them and consider submitting comments by December 1, 2023.
- The IRS and Treasury will issue separate proposed regulations to address substantive issues related to the excise tax, including the scope of taxable sales, calculating the tax liability, and excluding the tax from the drug’s price.
Source EY
