On June 25, 2013, P.L. 113-15 was enacted to expand the vaccine excise tax provision of IRC Sections 4131 and 4132. It adds vaccines against seasonal influenza to the long list of those with a 75 cent per dose tax. Like the other taxes, the funds go to the Vaccine Injury Compensation Trust Fund.
This tax is part of Chapter 32 of the federal tax law that covers manufacturer excise taxes. Here is an outline:
• Subchapter A—Automotive and Related Items (§§ 4061 to 4063–4105) • Subchapter B—Coal (§ 4121) • Subchapter C—Certain Vaccines (§§ 4131–4132) • Subchapter D—Recreational Equipment (§§ 4161–4182) • Subchapter E—Medical Devices (§ 4191) • Subchapter F—Special Provisions Applicable to Manufacturers Tax (§§ 4216–4220 to 4225) • Subchapter G—Exemptions, Registration, Etc. (§§ 4221–4227)H.R. 475 was introduced on Feb. 4, 2013. There was 40 minutes of debate in the House, and the bill became law via voice vote in both houses and was signed by President Obama on June 25. That’s fast!
The Joint Committee on Taxation scored the bill as generating “negligible” revenue. The Center for Disease Control estimates there were about 135 million flu vaccine doses in 2012-2013. That means the bill might generate about $101 million per year.
Why do I mention any of this?
• A tax bill was passed – and quickly. Not something we see often.
• How many people even knew there was a tax on various vaccines, to generate funds for the Vaccine Injury Compensation Trust Fund? Our tax law does a lot of things. The IRS has to collect this tax and administer it with forms and rules.
• There are many parts of the federal tax law that won’t get touched by upcoming tax reform which is focused on income tax reform. There is a lot of tax law beyond the income tax.
Just some things to think about.
What do you think?
Annette Nellen, CPA, Esq., is a professor in and director of San Jose State University’s graduate tax program (MST), teaching courses in tax research, accounting methods, property transactions, state taxation, employment tax, ethics, tax policy, tax reform, and high technology tax issues.
Annette is the immediate past chair of the AICPA Individual Taxation Technical Resource Panel and a current member of the Executive Committee of the Tax Section of the California Bar. Annette is a regular contributor to the AICPA Tax Insider and Corporate Taxation Insider e-newsletters. She is the author of BNA Portfolio #533, Amortization of Intangibles.
Annette has testified before the House Ways & Means Committee, Senate Finance Committee, California Assembly Revenue & Taxation Committee, and tax reform commissions and committees on various aspects of federal and state tax reform.
Prior to joining SJSU, Annette was with Ernst & Young and the IRS.
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