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Cabela’s Mistakenly Takes Medical Excise Tax

02/27/2013

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Online good news travels fast. Bad news travels faster. The viral sharing of Cabela’s receipts is a perfect example.

After the first of 2013 the Medical Device Excise Tax started showing up on the receipts for purchases made at sporting goods giant Cabela’s.

This receipt from one such store in Texas is making the rounds on the web. It shows an additional tax has been added to the purchase, after the local sales tax of nearly 10% was charged.

It appears to have been a mistake.

Customer service reps for Cabela’s stated the added tax was “a computer glitch that has been fixed.” Credit card purchasers will receive a refund over the phone. Cash purchases that were hit with the extra 2.3% tax must return to the store for a cash refund.

So what is The Medical Device Excise Tax (MDET)? First the tax is real, and it kicked in Jan. 1. In short, it’s a 2.3 percent tax on medical devices. According to the Federal Food, Drug & Cosmetic Act which provides that the term device means any apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory – used for medical purposes.

There is a retail exemption that covers “devices that are of a type that are generally purchased by the general public at retail for individual use,” as well as exemptions for eyeglasses, contact lenses and hearing aids.

So any tax applied to apparel, footwear and other consumer accessories is most likely not valid.

Just the same…the Cabela’s receipt going viral illustrates how touchy consumers are.

The current economy and consumers mindset is making life miserable for most retailers. It’s quite possible that a single piece of bad news could put our economy in another tail spin.

Let’s pray that doesn’t happen.

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