MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Ways and Means

By: Representative Williams

AN ACT TO AMEND SECTIONS 27-15-103 AND 27-15-109, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE PREMIUM TAXES IMPOSED ON THE GROSS AMOUNT OF PREMIUMS COLLECTED BY CERTAIN INSURANCE COMPANIES SHALL BE LOWER THAN THREE PERCENT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 27-15-103, Mississippi Code of 1972, is amended as follows:

27-15-103. (1) Except as otherwise provided in Section 83-61-11, in addition to the license tax now or hereafter provided by law, which tax shall be paid when the company enters or is admitted to do business in this state, there is hereby levied and imposed upon all foreign insurance companies and associations, including life insurance companies and associations, health, accident and industrial insurance companies and associations, fire and casualty insurance companies and associations, and all other foreign insurance companies and associations of every kind and description, an additional annual license or privilege tax on the gross amount of premium receipts received from, and on insurance policies and contracts written in, or covering risks located in this state, except for premiums received on policies issued to fund a deferred compensation plan qualified under Section 457 of the Federal Tax Code for federal tax exemption. In determining the amount of premiums, there shall be deducted therefrom premiums received for reinsurance from companies authorized to do business in this state, cash dividends paid under policy contracts in this state, and premiums returned to policyholders and cancellations on accounts of policies not taken, and, in the case of mutual insurance companies (including interinsurance and reciprocal exchanges, but not including mutual life, accident, health or industrial insurance companies) any refund made or credited to the policyholder other than for losses. The term "premium" as used herein shall also include policy fees, membership fees, and all other fees collected by the companies. No credit or deduction from gross premium receipts shall be allowed for any commission, fee or compensation paid to any agent, solicitor or representative. Provided, however, that any foreign insurance carrier selected to furnish service to the State of Mississippi under the State Employees Life and Health Insurance Plan shall not be required to pay the annual license or privilege tax on the premiums collected for coverage under the * * * plan.

(2) Except as provided in subsections (3) and (4) of this section, the rate of tax under this section shall be three percent (3%).

(3) The rate of tax applicable to foreign life insurance companies and associations and foreign health, accident and industrial insurance companies and associations is as follows:

For Premiums Received Rate

During the calendar year 2000 and

each calendar year before 3.0%

During the calendar year 2001 2.75%

During the calendar year 2002 2.5%

During the calendar year 2003 2.25%

During the calendar year 2004 and

each calendar year thereafter 2.0%

(4) Premiums received for individual life insurance policies in a face amount of Five Thousand Dollars ($5,000.00) or less shall be taxed at the rate of one-half of one percent (0.5%). Premiums received for individual life insurance policies in a face amount greater than Five Thousand Dollars ($5,000.00) and up to and including Twenty-five Thousand Dollars ($25,000.00) shall be taxed at the rate of one percent (1%). For purposes of computing the face amount of life insurance policies under this subsection (4), coverage under group life insurance policies shall be excluded, and all individual life insurance policies issued within sixty (60) days of another such policy on the life of the same applicant or applicants shall be treated as one (1) policy.

(5) In the event that the Mississippi Supreme Court or another court finally adjudicates that any tax levied prior to July 1, 1985, under the provisions of this section was collected unconstitutionally and that a liability for a credit or refund for such collection has accrued, then the rate of tax set forth above shall be increased to four percent (4%) for a period of six (6) years beginning July 1 following such adjudication.

(6) The taxes herein levied and imposed * * * shall be reduced by the net amount of income tax paid to this state for the preceding calendar year; however, in no event may the credit be taken more than once. The credit herein authorized shall, in no event, be greater than the premium tax due under this section, it being the purpose and intent of this paragraph that whichever of the annual insurance premium tax or the income tax is greater in amount shall be paid.

SECTION 2. Section 27-15-109, Mississippi Code of 1972, is amended as follows:

27-15-109. (1) Except as otherwise provided in Section 83-61-11, there is hereby levied and imposed upon each domestic company doing business in this state an annual tax on the gross amount of premiums collected by such domestic company on insurance policies and contracts written in, or covering risks located in this state, except for premiums received on policies issued to fund a retirement, thrift or deferred compensation plan qualified under Section 401, Section 403 or Section 457 of the Federal Tax Code for federal tax exemption. Provided, however, that a domestic insurance company against which is levied additional premium tax under retaliatory laws of other states in which it does business, as a result of the tax * * * provided by Sections 27-15-103 through 27-15-117, may deduct the total of such additional retaliatory tax from the state income tax due by it to the State of Mississippi. The insurance carriers selected to furnish service to the State of Mississippi, under the State Employees Life and Health Insurance Plan, shall not be required to pay the premium tax levied against insurance companies under this section on the premiums collected for coverage under the state employees plan.

(2) Except as provided in subsections (3) and (4) of this section, the rate of tax under this section shall be three percent (3%).

(3) The rate of tax applicable to domestic life insurance companies and associations and domestic health, accident and industrial insurance companies and associations is as follows:

For Premiums Received Rate

During the calendar year 2000 and

each calendar year before 3.0%

During the calendar year 2001 2.75%

During the calendar year 2002 2.5%

During the calendar year 2003 2.25%

During the calendar year 2004 and

each calendar year thereafter 2.0%

(4) Premiums received for individual life insurance policies in a face amount of Five Thousand Dollars ($5,000.00) or less shall be taxed at the rate of one-half of one percent (0.5%). Premiums received for individual life insurance policies in a face amount greater than Five Thousand Dollars ($5,000.00) and up to and including Twenty-five Thousand Dollars ($25,000.00) shall be taxed at the rate of one percent (1%). For purposes of computing the face amount of life insurance policies under this subsection (4), coverage under group life insurance policies shall be excluded, and all individual life insurance policies issued within sixty (60) days of another such policy on the life of the same applicant or applicants shall be treated as one (1) policy.

(5) Except as expressly provided by subsection (1) of this section, all of the provisions of Sections 27-15-103 through 27-15-117 shall be applicable to such domestic insurance companies. However, the statement filed with the State Tax Commission by domestic insurance companies as provided in Section 27-15-107 shall include therein a sworn statement of all additional retaliatory premium taxes paid by them to other states as a result of the * * * taxes imposed by Sections 27-15-103 through 27-15-117, itemized by states to which paid.

(6) In the event that the Mississippi Supreme Court or another court finally adjudicates that any tax levied prior to July 1, 1985, under the provisions of this section was collected unconstitutionally and that a liability for a credit or refund for such collection has accrued, then the rate of tax set forth above shall be increased to four percent (4%) for a period of six (6) years beginning July 1 following such adjudication.

SECTION 3. Nothing in this act shall affect or defeat any claim, assessment, appeal, suit, right or cause of action for taxes due or accrued under the statewide privilege tax laws before the date on which this act becomes effective, whether such claims, assessments, appeals, suits or actions have been begun before the date on which this act becomes effective or are begun thereafter; and the provisions of the statewide privilege tax laws are expressly continued in full force, effect and operation for the purpose of the assessment, collection and enrollment of liens for any taxes due or accrued and the execution of any warrant under such laws before the date on which this act becomes effective, and for the imposition of any penalties, forfeitures or claims for failure to comply with such laws.

SECTION 4. This act shall take effect and be in force from and after January 1, 2000.