2000 Legislation
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HOUSE BILL NO. 748 – Disability ins, premium tax

HOUSE BILL NO. 748

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Daily Data Tracking History



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

Bill Text


 H0748
                                                                        
                                                                        
  ||||              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
 32        insurance.
 33        (2)  Subject to section 41-403, Idaho Code, the rate of tax  shall  be  as
 34    follows:
 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
 38        (2%).
 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
                                                                        
                                           2
                                                                        
  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 sections
 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
                                                                        
                                           3
                                                                        
  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 / Fiscal Impact


                  STATEMENT OF PURPOSE
                       RS 10123

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.

                        FISCAL IMPACT

There is no fiscal impact.

Contact
Name: Sen. Joe Stegner
Phone: 208-332-1000

STATEMENT OF PURPOSE/FISCAL NOTE                    H 748