Print Friendly HOUSE BILL NO. 305 – Insurance premium tax, credit
HOUSE BILL NO. 305
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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
|||| 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
2 RELATING TO INSURANCE PREMIUM TAX; AMENDING SECTION 41-402, IDAHO CODE, TO
3 PROVIDE FOR A CREDIT AGAINST THE PREMIUM TAX FOR CERTAIN MANDATORY ASSESS-
4 MENTS AND TO MAKE TECHNICAL CORRECTIONS.
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
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
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
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
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
General Fund would be reduced by $833,893 in 1999.
CONTACT: Julie Taylor, Blue Cross of Idaho
Lyn Darrington, Regence Blue Shield of Idaho
STATEMENT OF PURPOSE/ FISCAL NOTE Bill No. H 305