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The Florida Senate

2004 Florida Statutes

Section 624.509, Florida Statutes 2004

624.509  Premium tax; rate and computation.--

(1)  In addition to the license taxes provided for in this chapter, each insurer shall also annually, and on or before March 1 in each year, except as to wet marine and transportation insurance taxed under s. 624.510, pay to the Department of Revenue a tax on insurance premiums, premiums for title insurance, or assessments, including membership fees and policy fees and gross deposits received from subscribers to reciprocal or interinsurance agreements, and on annuity premiums or considerations, received during the preceding calendar year, the amounts thereof to be determined as set forth in this section, to wit:

(a)  An amount equal to 1.75 percent of the gross amount of such receipts on account of life and health insurance policies covering persons resident in this state and on account of all other types of policies and contracts (except annuity policies or contracts taxable under paragraph (b)) covering property, subjects, or risks located, resident, or to be performed in this state, omitting premiums on reinsurance accepted, and less return premiums or assessments, but without deductions:

1.  For reinsurance ceded to other insurers;

2.  For moneys paid upon surrender of policies or certificates for cash surrender value;

3.  For discounts or refunds for direct or prompt payment of premiums or assessments; and

4.  On account of dividends of any nature or amount paid and credited or allowed to holders of insurance policies; certificates; or surety, indemnity, reciprocal, or interinsurance contracts or agreements; and

(b)  An amount equal to 1 percent of the gross receipts on annuity policies or contracts paid by holders thereof in this state.

(2)  Payment by the insurer of the license taxes and premium receipts taxes provided for in this part of this chapter is a condition precedent to doing business within this state.

(3)  Notwithstanding other provisions of law, the distribution of the premium tax and any penalties or interest collected thereunder shall be made to the General Revenue Fund in accordance with rules adopted by the Department of Revenue and approved by the Administration Commission.

(4)  The income tax imposed under chapter 220 and the emergency excise tax imposed under chapter 221 which are paid by any insurer shall be credited against, and to the extent thereof shall discharge, the liability for tax imposed by this section for the annual period in which such tax payments are made. As to any insurer issuing policies insuring against loss or damage from the risks of fire, tornado, and certain casualty lines, the tax imposed by this section, as intended and contemplated by this subsection, shall be construed to mean the net amount of such tax remaining after there has been credited thereon such gross premium receipts tax as may be payable by such insurer in pursuance of the imposition of such tax by any incorporated cities or towns in the state for firefighters' relief and pension funds and police officers' retirement funds maintained in such cities or towns, as provided in and by relevant provisions of the Florida Statutes. For purposes of this subsection, payments of estimated income tax under chapter 220 and of estimated emergency excise tax under chapter 221 shall be deemed paid either at the time the insurer actually files its annual returns under chapter 220 or at the time such returns are required to be filed, whichever first occurs, and not at such earlier time as such payments of estimated tax are actually made.

(5)  There shall be allowed a credit against the net tax imposed by this section equal to 15 percent of the amount paid by the insurer in salaries to employees located or based within this state and who are covered by the provisions of chapter 443. For purposes of this subsection:

(a)  The term "salaries" does not include amounts paid as commissions.

(b)  The term "employees" does not include independent contractors or any person whose duties require that the person hold a valid license under the Florida Insurance Code, except persons defined in s. 626.015(1), (14), and (16).

(c)  The term "net tax" means the tax imposed by this section after applying the calculations and credits set forth in subsection (4).

(d)  An affiliated group of corporations that created a service company within its affiliated group on July 30, 2002, shall allocate the salary of each service company employee covered by contracts with affiliated group members to the companies for which the employees perform services. The salary allocation is based on the amount of time during the tax year that the individual employee spends performing services or otherwise working for each company over the total amount of time the employee spends performing services or otherwise working for all companies. The total amount of salary allocated to an insurance company within the affiliated group shall be included as that insurer's employee salaries for purposes of this section.

1.  The term "affiliated group of corporations" means two or more corporations that are entirely owned by a single corporation and that constitute an affiliated group of corporations as defined in s. 1504(a) of the Internal Revenue Code.

2.  The term "service company" means a separate corporation within the affiliated group of corporations whose employees provide services to affiliated group members and which are treated as service company employees for unemployment compensation and common law purposes. The holding company of an affiliated group may not qualify as a service company. An insurance company may not qualify as a service company.

3.  If an insurance company fails to substantiate, whether by means of adequate records or otherwise, its eligibility to claim the service company exception under this section, or its salary allocation under this section, no credit shall be allowed.

(6)  The total of the credit granted for the taxes paid by the insurer under chapters 220 and 221 and the credit granted by subsection (5) shall not exceed 65 percent of the tax due under subsection (1) after deducting therefrom the taxes paid by the insurer under ss. 175.101 and 185.08 and any assessments pursuant to s. 440.51

(7)  Credits and deductions against the tax imposed by this section shall be taken in the following order: deductions for assessments made pursuant to s. 440.51; credits for taxes paid under ss. 175.101 and 185.08; credits for income taxes paid under chapter 220, the emergency excise tax paid under chapter 221 and the credit allowed under subsection (5), as these credits are limited by subsection (6); all other available credits and deductions.

(8)  From and after July 1, 1980, the premium tax authorized by this section shall not be imposed upon receipts of annuity premiums or considerations paid by holders in this state if the tax savings derived are credited to the annuity holders. Upon request by the Department of Revenue, any insurer availing itself of this provision shall submit to the department evidence which establishes that the tax savings derived have been credited to annuity holders. As used in this subsection, the term "holders" shall be deemed to include employers contributing to an employee's pension, annuity, or profit-sharing plan.

(9)  As used in this section "insurer" includes any entity subject to the tax imposed by this section.

History.--s. 81, ch. 59-205; ss. 21, 35, ch. 69-106; ss. 1, 3, ch. 71-9(B); s. 3, ch. 71-984; s. 3, ch. 76-168; s. 1, ch. 77-237; s. 1, ch. 77-457; s. 1, ch. 79-247; s. 1, ch. 80-18; s. 17, ch. 81-178; s. 69, ch. 82-243; ss. 6, 7, ch. 82-385; s. 8, ch. 84-170; s. 26, ch. 87-99; s. 13, ch. 87-226; s. 1, ch. 88-206; ss. 1, 22, ch. 89-167; s. 96, ch. 90-132; s. 11, ch. 90-249; s. 10, ch. 90-366; s. 39, ch. 92-173; s. 195, ch. 97-102; s. 12, ch. 98-132; s. 1, ch. 99-286; s. 3, ch. 2002-206; s. 60, ch. 2002-218; s. 36, ch. 2003-254; s. 843, ch. 2003-261; s. 105, ch. 2004-5.