1999 Legislation
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HOUSE BILL NO. 305 – Insurance premium tax, credit


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Daily Data Tracking History

H0305...............................................by REVENUE AND TAXATION
INSURANCE - PREMIUM TAX - Amends existing law relating to the insurance
premium tax to allow a credit against the premium tax for certain mandatory

02/25    House intro - 1st rdg - to printing
02/26    Rpt prt - to Rev/Tax

Bill Text


 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fifth Legislature                 First Regular Session - 1999

                             IN THE HOUSE OF REPRESENTATIVES

                                    HOUSE BILL NO. 305

                            BY REVENUE AND TAXATION COMMITTEE

 1                                        AN ACT

 5    Be It Enacted by the Legislature of the State of Idaho:

 6        SECTION  1.  That  Section  41-402, Idaho Code, be, and the same is hereby
 7    amended to read as follows:

 8        41-402.  PREMIUM TAX. (1)  Each  authorized  insurer,  and  each  formerly
 9    authorized  insurer  with  respect to insurance transacted while an authorized
10    insurer, shall file with the director on or before the dates in each year  set
11    forth  in  subsections  (3)  and (4) of this section, a statement (on forms as
12    prescribed and furnished by the director) under oath for the period set  forth
13    in  subsections (3) and (4) of this section, and pay the director a tax at the
14    rate set forth in subsection (2) of this section, on the following amounts:
15        (a)  As to life insurers, the amount of all gross premiums received by the
16        insurer on direct risks resident in this state, and also,  if  a  domestic
17        insurer,  on  direct risks resident in any other jurisdiction or jurisdic-
18        tions in which the insurer is not licensed and upon which no  premium  tax
19        is  otherwise paid or payable, less returned coupons and dividends paid to
20        or credited to policyholders.
21        (b)  As to all insurers other than life  insurers,  the  amount  of  gross
22        direct  premiums  written on policies covering subjects of insurance resi-
23        dent, located or performed in this state, and also, if a domestic insurer,
24        on such premiums in any other jurisdiction or jurisdictions in  which  the
25        insurer is not licensed and upon which no premium tax is otherwise paid or
26        payable,  less returned premiums, premiums on policies not taken and divi-
27        dends paid or credited to policyholders.  Foreign and domestic insur-
28        ers may reduce their premium tax obligation by  the  amount  of  mandatory
29        assessments  paid  under  the  provisions  of section 41-4711, Idaho Code.
30         As to title insurance "gross premium" means the insurance risk por-
31        tion of the amount charged for title insurance.
32        (2)  Subject to section 41-403, Idaho Code, the rate of tax  shall  be  as
33    follows:
34        (a)  As  to  title insurance, the rate of tax shall be one and five-tenths
35         per cent   percent  (1.5%).
36        (b)  As to all other kinds of insurance, the rate of tax shall be two  and
37        seventy-five  hundredths    per  cent      percent  
38        (2.75%).
39        (3) (a) Every  insurer with a tax obligation under this section shall make
40        prepayment of the tax obligations for the current  calendar  year's  busi-
41        ness,  if the sum of the tax obligations for the preceding calendar year's
42        business is four hundred dollars ($400) or more.
43        (b)  The director shall credit the prepayments toward the appropriate  tax


 1        obligations of the insurer for the current calendar year.
 2        (c)  The  minimum  amounts  of the prepayments shall be percentages of the
 3        insurer's tax obligation based on the preceding calendar  year's  business
 4        and the current year's rate, and shall be paid to the director's office by
 5        the due dates and in the following amounts:
 6             (i)   On or before June 15, sixty  per cent   percent
 7              (60%);
 8             (ii)  On  or  before September 15, twenty  per cent  
 9             percent  (20%); and
10             (iii) On or before December 15, fifteen  per cent    
11             percent  (15%).
12        (4)  On or before March 1, any balance of tax due for the preceding calen-
13    dar year shall be paid to the director.
14        (5)  The  effect of transferring policies of insurance from one insurer to
15    another insurer is to transfer the tax prepayment obligation with  respect  to
16    the policies.
17        (6)  This  section  shall  not apply as to any domestic reciprocal insurer
18    doing exclusively a  workmen's   worker's   compensation
19    business and complying with the provisions of the  workmen's  
20    worker's    compensation  law  of this state and writing  workmen's
21      worker's  compensation only for members under that law,  if
22    its representatives or agents or the attorney in fact executing such contracts
23    are not compensated on a commission basis.
24        (7)  This  section  shall  not  apply as to life insurance policies issued
25    under pension plans or profit-sharing plans exempt or qualified under sections
26    401(a), 403, 404, 408, or 501(a) of the United States internal  revenue  code,
27    as  hereafter  amended   or  renumbered from time to time, nor to annuity con-
28    tracts in general.
29        (8)  This section shall not apply to any domestic reciprocal insurer which
30    exclusively insures members who are governmental entities, as defined by  sec-
31    tion 6-902(1), (2) and (3), Idaho Code.
32        (9)  The  amount  of tax due for the current year shall be paid in full in
33    the manner and at the times required in this section  without  any  credit  or
34    offset for refunds or other amounts due or claimed to be due by the insurer.

Statement of Purpose / Fiscal Impact

                            STATEMENT OF PURPOSE

The purpose of this bill is to allow health insurance companies to reduce
their yearly premium tax payment by the yearly assessment they are charged
to cover the losses in the Individual and Small Group Reinsurance pool. The
reinsurance program was formed to reinsure high risk individuals and small
business groups.

                                 FISCAL NOTE

General Fund would be reduced by $833,893 in 1999.

CONTACT:  Julie Taylor, Blue Cross of Idaho
      Lyn Darrington, Regence Blue Shield of Idaho