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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 assessments. 02/25 House intro - 1st rdg - to printing 02/26 Rpt prt - to Rev/Tax
H0305|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN 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 33 follows: 34 (a) As to title insurance, the rate of tax shall be one and five-tenths 35per centpercent (1.5%). 36 (b) As to all other kinds of insurance, the rate of tax shall be two and 37 seventy-five hundredthsper centpercent 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 2 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, sixtyper centpercent 7 (60%); 8 (ii) On or before September 15, twentyper cent9 percent (20%); and 10 (iii) On or before December 15, fifteenper cent11 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 aworkmen'sworker's compensation 19 business and complying with the provisions of theworkmen's20 worker's compensation law of this state and writingworkmen's21worker'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
RS08843
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
331-7357
Lyn Darrington, Regence Blue Shield of Idaho
333-7818
STATEMENT OF PURPOSE/ FISCAL NOTE Bill No. H 305