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Senate approves bill clarifying taxation of insurers; debate centers on retroactive charges
Summary
Engrossed House Bill 2487, clarifying tax treatment for insurer affiliates and subjecting non-premium affiliates to business-and-occupation taxation (with retroactive application to 2019), passed in the Senate after debate about fairness and a prior Supreme Court decision; final vote was 27-22.
The Senate on March 11 passed Engrossed House Bill 2487, a measure sponsors described as closing a tax fairness gap by ensuring the premium portion of core insurance activity is taxed under the premium tax while affiliates that do not receive premiums are treated as other corporations for business-and-occupation tax purposes.
Senator Tess Robinson told the chamber the bill "clarifies policy around how insurance companies in this state are taxed" and urged support on grounds of tax fairness. Senator Mark Gildan objected to a retroactive provision in the bill that would charge affiliates back to 2019. Gildan cited a Department of Revenue determination and a subsequent Supreme Court ruling he said found affiliates not required to pay the tax under prior law; he called retroactive assessment "not fair."
After floor remarks, the roll call produced 27 ayes and 22 nays; the chair declared the bill passed and its title to be the title of the act. No amendment modifying the retroactivity clause was recorded on the floor during the March 11 session.
Why it matters: The bill affects how insurance companies and their affiliates are taxed and could expose affiliates to retroactive tax liability back to 2019, a point opponents said raises fairness concerns and legal questions.
What happens next: The bill, having passed the Senate, will proceed per legislative transmittal procedures to become law if concurred by the House (and after any gubernatorial action).
Quote: "This is about tax fairness," Senator Robinson said. "It's about treating companies and our insurance companies and their affiliates as everyone else in the state pays taxes."
