Print Friendly HOUSE BILL NO. 748 – Disability ins, premium tax
HOUSE BILL NO. 748
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H0748.....................................................by WAYS AND MEANS
DISABILITY INSURANCE - Amends existing law to provide for a two percent
premium tax on disability insurance; and to exclude disability insurers
from the reduced tax based on Idaho investments.
03/14 House intro - 1st rdg - to printing
03/15 Rpt prt - to Rev/Tax
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 748
BY WAYS AND MEANS COMMITTEE
1 AN ACT
2 RELATING TO PREMIUM TAX; AMENDING SECTION 41-402, IDAHO CODE, TO PROVIDE FOR A
3 TWO PERCENT PREMIUM TAX ON DISABILITY INSURANCE AND TO MAKE TECHNICAL COR-
4 RECTIONS; AMENDING SECTION 41-403, IDAHO CODE, TO EXCLUDE DISABILITY
5 INSURERS FROM THE REDUCED TAX BASED ON IDAHO INVESTMENTS AND TO MAKE TECH-
6 NICAL CORRECTIONS; DECLARING AN EMERGENCY AND PROVIDING A RETROACTIVE
7 EFFECTIVE DATE.
8 Be It Enacted by the Legislature of the State of Idaho:
9 SECTION 1. That Section 41-402, Idaho Code, be, and the same is hereby
10 amended to read as follows:
11 41-402. PREMIUM TAX. (1) Each authorized insurer, and each formerly
12 authorized insurer with respect to insurance transacted while an authorized
13 insurer, shall file with the director on or before the dates in each year set
14 forth in subsections (3) and (4) of this section, a statement (on forms as
15 prescribed and furnished by the director) under oath for the period set forth
16 in subsections (3) and (4) of this section, and pay the director a tax at the
17 rate set forth in subsection (2) of this section, on the following amounts:
18 (a) As to life insurers, the amount of all gross premiums received by the
19 insurer on direct risks resident in this state, and also, if a domestic
20 insurer, on direct risks resident in any other jurisdiction or jurisdic-
21 tions in which the insurer is not licensed and upon which no premium tax
22 is otherwise paid or payable, less returned coupons and dividends paid to
23 or credited to policyholders.
24 (b) As to all insurers other than life insurers, the amount of gross
25 direct premiums written on policies covering subjects of insurance resi-
26 dent, located or performed in this state, and also, if a domestic insurer,
27 on such premiums in any other jurisdiction or jurisdictions in which the
28 insurer is not licensed and upon which no premium tax is otherwise paid or
29 payable, less returned premiums, premiums on policies not taken and divi-
30 dends paid or credited to policyholders. As to title insurance "gross pre-
31 mium" means the insurance risk portion of the amount charged for title
33 (2) Subject to section 41-403, Idaho Code, the rate of tax shall be as
35 (a) As to title insurance, the rate of tax shall be one and five-tenths
36 per cent percent (1.5%).
37 (b) As to disability insurance, the rate of tax shall be two percent
39 (c) As to all other kinds of insurance, the rate of tax shall be two and
40 seventy-five hundredths per cent percent (2.75%).
41 (3) (a) Every insurer with a tax obligation under this section shall make
42 prepayment of the tax obligations for the current calendar year's busi-
43 ness, if the sum of the tax obligations for the preceding calendar year's
1 business is four hundred dollars ($400) or more.
2 (b) The director shall credit the prepayments toward the appropriate tax
3 obligations of the insurer for the current calendar year.
4 (c) The minimum amounts of the prepayments shall be percentages of the
5 insurer's tax obligation based on the preceding calendar year's business
6 and the current year's rate, and shall be paid to the director's office by
7 the due dates and in the following amounts:
8 (i) On or before June 15, sixty per cent percent (60%);
9 (ii) On or before September 15, twenty per cent percent (20%); and
10 (iii) On or before December 15, fifteen per cent percent (15%).
11 (4) On or before March 1, any balance of tax due for the preceding calen-
12 dar year shall be paid to the director.
13 (5) The effect of transferring policies of insurance from one insurer to
14 another insurer is to transfer the tax prepayment obligation with respect to
15 the policies.
16 (6) This section shall not apply as to any domestic reciprocal insurer
17 doing exclusively a workmen's worker's compensation business and complying
18 with the provisions of the workmen's worker's compensation law of this state
19 and writing workmen's worker's compensation only for members under that law,
20 if its representatives or agents or the attorney in fact executing such con-
21 tracts are not compensated on a commission basis.
22 (7) This section shall not apply as to life insurance policies issued
23 under pension plans or profit-sharing plans exempt or qualified under section s
24 401(a), 403, 404, 408 , or 501(a) of the United States internal revenue code,
25 as hereafter amended or renumbered from time to time, nor to annuity con-
26 tracts in general.
27 (8) This section shall not apply to any domestic reciprocal insurer which
28 exclusively insures members who are governmental entities, as defined by sec-
29 tion 6-902(1), (2) and (3), Idaho Code.
30 (9) The amount of tax due for the current year shall be paid in full in
31 the manner and at the times required in this section without any credit or
32 offset for refunds or other amounts due or claimed to be due by the insurer.
33 SECTION 2. That Section 41-403, Idaho Code, be, and the same is hereby
34 amended to read as follows:
35 41-403. REDUCED TAX BASED ON IDAHO INVESTMENTS. Provided that it shall
36 comply with rules and standards duly promulgated by the director of insurance
37 for the purposes of assuring the establishment and maintenance in this state
38 of services and facilities consistent with the nature and extent of its opera-
39 tions, any insurer, other than a life insurance company or a disability
40 insurer, having at all times throughout the year with respect to which the tax
41 is payable twenty-five per cent percent (25%) or more of its assets invested
42 in the investments set forth below, shall, with respect to premiums on which
43 taxes are to be computed under section 41-402(2)(a) and (c), Idaho Code, com-
44 pute and pay such tax at the rate of one and four-tenths per cent percent
45 (1.4%) instead of at any higher rate provided for under section 41-402, Idaho
46 Code; and provided further, any life insurance company, in order to qualify
47 for a tax rate of one and four-tenths per cent percent (1.4%) instead of any
48 higher rate provided for under section 41-402, Idaho Code, shall maintain
49 throughout the year with respect to which tax is payable at least twenty-five
50 per cent percent (25%) of the reserve required under section 41-706(4), Idaho
51 Code, invested in the designated investments set forth below:
52 (1) Bonds or warrants of this state, or of any county, city or incorpo-
53 rated town or district within this state authorized by law to be issued ,; or
1 (2) Taxable real estate within this state ,; or
2 (3) First mortgages upon improved, unencumbered real estate situated
3 within this state ,; or
4 (4) Stocks or bonds of corporations organized under the laws of, or main-
5 taining their home office and principal administrative records in this state
6 if such stocks or bonds are lawful investments of the insurer under chapter 7
7 (investments) of this code ,; or
8 (5) Bonds authorized by law to be issued against the revenues derived
9 from the operation in this state of domestic water and sewage systems or off-
10 street parking facilities ,; or
11 (6) Time deposits with Idaho banks, or trust companies, or savings and
12 loan associations, or building and loan associations or on deposit for inter-
13 est income purposes with any legally organized and approved financial institu-
14 tion domiciled within this state and insured by any instrumentality of the
15 United States government.
16 SECTION 3. An emergency existing therefor, which emergency is hereby
17 declared to exist, this act shall be in full force and effect on and after its
18 passage and approval, and retroactively to January 1, 2000.
STATEMENT OF PURPOSE
The purpose of this legislation is to provide for a two
percent premium tax on disability insurance, to make technical
corrections, and to exclude disability insurers from the
reduced tax based on Idaho investments.
There is no fiscal impact.
Name: Sen. Joe Stegner
STATEMENT OF PURPOSE/FISCAL NOTE H 748