637 Registration Program
Under the Code and regulations, each person who engages in certain specified activities relating to excise tax must be registered by the IRS before engaging in that activity. In other cases, a person is required to be registered by the IRS in order to receive an excise tax benefit, such as, the right to sell or buy an article tax free or to file a claim. Taxpayers may use Form 637, Application for Registration (For Certain Excise Tax Activities), to apply for registration for activities under sections 4101, 4222 and 4682 of the Internal Revenue Code. Depending on the activity applied for, the person must meet certain registration tests in order to receive an approved registration number. The registration tests vary according to the activity; it may include an inspection of the person’s business premises. Each business unit that has, or is required to have, a separate employer identification number is treated as a separate person, and must submit their own Form 637 application.
The address to mail your Form 637 is:
Department of the Treasury
Internal Revenue Service Center
Excise Operations Unit - Form 637 Application
Cincinnati, OH 45999
This Web application provides the ability for businesses to confirm whether individuals/companies have a valid IRS registration.
Form 637 Revised for Medical Device Excise Tax
The IRS revised Form 637, Application for Registration (For Certain Excise Tax Activities), to enable taxpayers to apply for registration with the IRS as a manufacturer or importer of taxable medical devices, or as a purchaser of taxable medical devices for further manufacture (or for resale for further manufacture) or for export (or for resale for export). A taxpayer is not registered until the IRS issues a letter of registration, which includes a registration number, to the taxpayer. The IRS will register a taxpayer only if the IRS determines that the taxpayer meets the applicable registration requirements.
Before a manufacturer or importer may sell a taxable medical device tax-free for further manufacture or export, the manufacturer or importer, as well as the first purchaser and second purchaser (if applicable), must all be registered by the IRS. Other administrative and record-keeping requirements also apply. See Publication 510 pages 30-31 (under “Requirements for Exempt Sales”).
Activity letter A was revised to include manufacturers of taxable medical device. The term “manufacturer” includes an importer. Thus, an importer of taxable medical devices that wishes to apply for registration with the IRS to sell taxable medical devices tax-free for further manufacture or export (or for resale for further manufacture or export), should apply for registration under activity letter A.
Activity letter B was revised to include purchasers of taxable medical devices for use in further manufacturing or for resale to a second purchaser for further manufacturing.
Activity letter D was revised to include purchasers of taxable medical devices (with a place of business in the United States) for export or for resale to a second purchaser for export.
Q1. Who is required to apply for registration with the IRS, through the Form 637 process, in order to make sales or purchases of taxable medical devices?
A1. There is no requirement to apply for registration with the IRS through the Form 637 process. However, to make a tax-free sale of a taxable medical device for further manufacture or export, or for resale to a second purchaser for further manufacture or export, generally the manufacturer or importer, the first purchaser, and the second purchaser (if any), must be registered. Form 637 is available on IRS.gov; type Form 637 into the search box.
A manufacturer or importer that is not registered, or that sells a taxable medical device for further manufacture or export to a purchaser that is not registered (or sells for resale to a second purchaser that is not registered) is liable for tax on its sales of taxable medical devices. However, the manufacturer or importer may submit a claim for credit or refund of the medical device excise tax that it paid with respect to the taxable medical device sales if certain requirements are met. See Publication 510, page 31 (under “Credits or Refunds”).
Q2. A manufacturer wishes to sell a taxable medical device tax-free directly to a foreign purchaser. Must the manufacturer and the purchaser both be registered by the IRS through the Form 637 application process?
A2. Generally, both the manufacturer and the purchaser must be registered by the IRS. However, in the case of sales or resales to a foreign purchaser for export, where the first purchaser or the second purchaser is located in a foreign country, IRS regulations provide that a foreign purchaser does not need to be registered. The manufacturer still must be registered in order to make the tax-free sale.
Q3. A C corporation that manufactures taxable medical devices files a consolidated income tax return with two of its subsidiaries. The parent and each subsidiary intend to sell certain taxable medical devices tax-free for further manufacture. Can the parent apply for a consolidated registration on Form 637 to register all three entities?
A3. No. Federal excise tax registration applicants cannot apply for registration on a consolidated basis. Each entity that has, or is required to have, its own employer identification number and that incurs medical device excise tax liability must apply for registration on a separate Form 637 application, in order to sell taxable medical devices tax-free for further manufacture.
Q4. Should an entity that is disregarded for income tax purposes apply for a Form 637 registration in the entity's name or the owner's name?
A4. Any person who has an EIN or who is required to have an EIN, regardless of whether the person is an entity organized under state law, is recognized for excise tax purposes. Thus, an entity that is disregarded for income tax purposes is not disregarded for medical device excise tax purposes, but is treated as an entity separate from its owner. The entity, not the owner, is responsible for filing Form 720, Quarterly Federal Excise Tax Return, and payment of the tax. Therefore, if an entity that is disregarded for income tax purposes intends to make tax-free sales or purchases for further manufacture or for export, or for resale for further manufacture or export, the entity must apply for registration with the IRS through the Form 637 process.