12B-8.001: Premium Tax; Rate and Computation
12B-8.0012: Insurance Policy Surcharge; Rate and Computation
12B-8.003: Tax Statement; Overpayments
12B-8.006: State Fire Marshal Regulatory Assessment and Surcharge; Levy and Amount
12B-8.007: Deposit of Certain Tax Receipts; Refund of Improper Payments
12B-8.016: Retaliatory Provisions
PURPOSE AND EFFECT: The purpose of the proposed amendments to Rule Chapter 12B-8, F.A.C. (Insurance Premium Taxes, Fees and Surcharges), is to update statutory and rule references, remove unnecessary effective dates, remove provisions regarding the emergency excise tax repealed effective January 1, 2012, by section 22, Chapter 2011-76, L.O.F., and provide technical changes.
SUMMARY: The proposed amendments to Rule 12B-8.001, F.A.C. (Premium Tax; Rate and Computation), update statutory references, remove unnecessary effective dates, remove provisions regarding the emergency excise tax, and update an example regarding credits against the tax.
The proposed amendments to Rule 12B-8.0012, F.A.C. (Insurance Policy Surcharge; Rate and Computation), remove unnecessary effective dates and the trust fund into which the insurance policy surcharge proceeds are deposited, as provided in Section 252.372, F.S.
The proposed amendments to Rule 12B-8.003, F.A.C. (Tax Statement; Overpayments): (1) remove the requirement for a corporate officer or attorney to declare the correctness and completeness of the insurance premium tax, fee, and surcharge return that is redundant of provisions contained in insurance premium tax returns; and (2) adopt, by reference, changes to forms used by the Department in the administration of the insurance premium taxes, fees, and surcharges.
The proposed amendments to Rule 12B-8.006, F.A.C. (State Fire Marshal Regulatory Assessment and Surcharge; Levy and Amount), remove obsolete provisions regarding the trust fund into which the regulatory assessment and surcharge are deposited. Section 624.516, F.S., requires the regulatory assessment imposed under Section 624.515(1), F.S., and the surcharge imposed under Section 624.515(2), F.S., to be deposited into the Insurance Regulatory Trust Fund.
The proposed repeal of Rule 12B-8.007, F.A.C. (Deposit of Certain Tax Receipts; Refund of Improper Payments), removes unnecessary provisions regarding the deposit and distribution of proceeds from all premium taxes that are provided in Section 624.521, F.S.
The proposed amendments to Rule 12B-8.016, F.A.C. (Retaliatory Provisions), remove unnecessary effective dates, obsolete provisions, and provisions regarding the emergency excise tax.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:
The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency.
The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: 1) no requirement for the Statement of Economic Regulatory Costs (SERC) was triggered under Section 120.541(1), F.S.; and 2) based on past experiences with activities for providing the public tax information and rules of this nature, the adverse impact or regulatory cost, if any, do not exceed nor would exceed any one of the economic analysis criteria in a SERC, as set forth in Section 120.541(2)(a), F.S.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
RULEMAKING AUTHORITY: 213.06(1), 220.183(4)(d), 288.99(11), 624.5105(4)(b), 1002.395(13) FS., Ch. 93-128, L.O.F.
LAW IMPLEMENTED: 92.525, 175.041, 175.101, 175.1015, 175.111, 175.121, 175.141, 175.151, 185.02, 185.03, 185.08, 185.085, 185.09, 185.10, 185.12, 185.13, 213.05, 213.053, 213.235, 213.37, 220.183, 220.19, 220.191, 252.372, 288.99, 440.51, 443.1216, 624.11, 624.402, 624.4072, 624.4094, 624.4621, 624.4625, 624.475, 624.501, 624.509, 624.5091, 624.5092, 624.50921, 624.510, 624.5105, 624.51055, 624.5107, 624.511, 624.515, 624.516, 624.518, 624.519, 624.520, 624.521, 624.601, 624.610, 626.7451(11), 627.311, 627.351, 627.3512, 627.357(9), 627.7711, 627.943, 628.6015, 629.401, 629.5011, 631.72, 632.626, 634.131, 634.313(2), 634.415(2), 636.066, 642.0301, 642.032, 1002.395 FS., Ch. 93-128, s. 29, Ch. 2005-280, L.O.F.
A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
DATE AND TIME: October 26, 2011, 10:00 a.m.
PLACE: 2450 Shumard Oak Boulevard, Building One, Room 1220, Tallahassee, Florida
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Tammy Miller at (850)617-8346. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Terrence Branch, Tax Law Specialist, Technical Assistance and Dispute Resolution, Department of Revenue, P. O. Box 7443, Tallahassee, Florida 32314-7443, telephone (850)717-6196
THE FULL TEXT OF THE PROPOSED RULE IS:
12B-8.001 Premium Tax; Rate and Computation.
(1) No change.
(a) A tax at the rate of 1.75 percent of the gross amount of receipts for insurance premiums and assessments shall be applied to the following types of policies:
1. through 2. No change.
3. Reciprocal insurance under Chapter 629 Section 629.5011, F.S.
4. through 9. No change.
(b) No change.
(c) A Effective July 1, 1988, a tax at the rate of 1.6 percent of the gross premiums, contributions, and assessments received by the following shall be applied:
1. Commercial self-insurance fund under Section 624.475, F.S.
2. Group self-insurance fund under Section 624.4621, F.S.
(d) A tax at the rate of 1.6 percent of the gross premiums, contributions, or assessments received by the following shall be applied:
1. Medical Malpractice Self-Insurance under Section 627.357, F.S.
2. Assessable Mutual Insurers under Section 628.6015, F.S., effective October 1, 1991.
3. Corporation Not for Profit Self-Insurance Funds under Section 624.4625, F.S.
4. Public Housing Authorities Self-Insurance Funds under Section 624.46226, F.S.
(e) No change.
(2) No change.
(a) The installment of the estimated premium tax due shall not be less than 90 percent of the amount finally shown to be due in any quarter, as evidenced by the annual report, without deductions for any credits. The Effective January 1, 1993, the 90 percent is shall be based on the actual tax paid for that year, as evidenced by the annual return, after allowable credits. The 90 percent will be determined by computing the gross tax due for each quarter, direct premiums written times the tax rate, less 25 percent of the allowable credits as evidenced by line 2 of the first page of the annual return filed for that year times 90 percent. However, the taxpayer has the option of paying, in each installment, 27 percent of the amount of annual tax reported, after allowable credits, on his return for the previous year without penalty or interest applying. If a return was not filed for the previous year, the installments must meet the 90 percent requirement. If the tax is not paid in this manner, a 10 percent penalty shall be imposed on each underpayment or late payment of tax due and payable for that quarter. If the installment is based on 27 percent of the amount of the annual tax reported on the return for the preceding year and the installment payment is remitted to the Department after the due date, the installment shall be based on the 90 percent requirement instead of the 27 percent method. Any underpayment or delinquent payment shall be subject to a penalty of 10 percent, and interest from the due date until paid.
(b) through (c) No change.
(3) Credits Against the Tax.
(a)1. The corporate income tax imposed under Chapter 220, F.S., and the emergency excise tax imposed under Chapter 221, F.S., which is are, or should have been, filed and paid by an insurer shall discharge the liability for the insurance premium tax (IPT) imposed under Section 624.509, F.S., for the annual period in which such tax payment is, payments are or should have been made, to the extent of the maximum allowed. Any insurer issuing policies insuring against loss or damage from the risks of fire, tornado, and certain casualty lines may take a credit against gross premium receipts tax for the excise tax(es) imposed by Sections 175.101 and 185.08, F.S.
2.a. When an insurer is required to file a corporate income tax return where the due date and extended due date are in different calendar years, the due date, or the extended date when a valid extension of time is made of said Florida return, determines the annual period in which such tax payments should have been made.
b. For example, a Florida corporate income tax return for tax year ending August 31, 2013 2000, is due, without extension, on December 1, 2013 2000. Since the Florida corporate income tax return is due on or before December 31, 2013 2000, the insurer should include the amount of tax due on the return in computation of the corporate income tax and emergency excise tax credit on its 2013 2000 insurance premium tax return (Form, the 2000 DR-908, which is due March 1, 2014) 2001. If, however, the insurer extended the due date of the Florida corporate income tax return to June 1, 2014 2001, and did not file and pay the return on or before December 31, 2013 2000, the amount of tax due on the return is included in the computation of the corporate income tax and emergency excise tax credit on its 2014 2001 insurance premium tax return (Form, the 2001 DR-908, which is due March 1, 2015) 2002.
3. If a taxpayer is required to amend its corporate income tax liability under Chapter 220, F.S., the taxpayer shall amend its corresponding insurance premium tax return for the tax year in which it claimed, or was entitled to claim the credit provided in Section 624.509(4), F.S., for the corporate income tax paid for that tax year. The taxpayer shall file an amended insurance premium tax return and pay additional tax due, if any, or claim a refund, if any, as provided in Section 624.50921, F.S.
(b) Salaries. Fifteen percent of the amount paid after June 30, 1988, in salaries by the insurer to employees located or based in Florida may be credited against the net tax imposed by Section 624.509, F.S.
1. through 2. No change.
3. Salary credit shall be allowed only to the extent that:
a. The employees are not disqualified under Section 624.509(5), F.S.;
b. The employees are located or based in Florida; and
c. The insurer claiming the credit is the employer, as defined in Section 443.036(17), F.S., of the claimed employees, and said insurer satisfies the Chapter 60BB-2 38B-2, F.A.C., filing requirements.
4. through 5. No change.
6. Net tax is the tax imposed under Section 624.509(1), F.S., after deductions for the corporate income tax imposed under Chapter 220, F.S., the emergency excise tax imposed under Chapter 221, F.S., and for gross premium receipts tax payable for firefighters’ firefighter’s pension trust funds under Section 175.101, F.S., and police officers’ retirement funds under Section 185.08, F.S.
7. Salary Tax Credit Exceptions.
a. through c. No change.
d. Effective July 1, 2006, Section 624.509(6)(b), F.S., provides that, to the extent that the salary tax credit is limited by the 65 percent limitation, the excess of the salary tax credit that was available and exceeded the 65 percent limitation may be transferred to any insurer that is a member of that insurer’s affiliated group if such excess salary tax credit is related to salaries and wages of employees whose place of employment is located within an enterprise zone created pursuant to Chapter 290, F.S. The amount of such excess salary tax credit transferred to all affiliates can not exceed 25 percent of such excess salary tax credit. An affiliated group of corporations that participates in a concurrent common paymaster arrangement as defined in Section 443.1216, F.S., is not eligible to use this provision. Any such transferred credits are subject to the same provisions and limitations set forth in Part IV, Chapter 624, F.S.
(c) Assessments Credited Against the Tax.
1. No change.
2.a. Insurers Effective with the tax return filed for the 1997 taxable year, insurers who have paid an assessment to the Florida Life and Health Insurance Guaranty Association (Association) may claim a credit for part of such assessment as provided in Section 631.72, F.S. Any credits not taken or utilized when available cannot be carried forward.
b. through c. No change.
(d) No change.
(e) Certified Capital Company (CAPCO) Credit.
1. through 2. No change.
3. Transfer/Sale of CAPCO Credit. Effective May 26, 2005, CAPCO credits may be sold. A transfer or sale of a CAPCO credit will not affect the time schedule for taking the CAPCO credit. The claim of a transferee of a certified investor’s unused CAPCO credit is permitted in the same manner and subject to the same provisions and limitations as the original certified investor. Transfers or sales of a current year CAPCO credit (the amount of CAPCO credit available to be claimed in the current tax year), future year CAPCO credits (the amount of CAPCO credit available to be claimed in future years – excluding carryover CAPCO credits), and CAPCO credit carryovers (the amount of CAPCO credit carried over from prior years where the current year CAPCO credit at that time was not fully used) are allowed.
a. through b. No change.
4. No change.
(f) No change.
(4) The maximum allowable credit for corporate income tax, emergency excise tax and salaries cannot exceed sixty-five percent of the tax due under Section 624.509(1), F.S., after deducting the taxes paid under Sections 175.101 and 185.08, F.S., and assessments pursuant to Section 440.51, F.S.
(5) No change.
(6) Credits and deductions against the tax imposed by Sections 624.509 and 624.510, F.S., shall be taken in the following order:
(a) Deductions for assessments under Section 440.51, F.S.
(b) Credits for taxes paid under Sections 175.101 and 185.08, F.S.
(c) Credits for corporate income taxes paid under Chapter 220, F.S.
(d) Credits for the emergency excise tax paid under Chapter 221, F.S.
(d)(e) Salary tax credit.
(e)(f) All other available credits and deductions.
(f)(g) A refund will not be created by credits.
(7) through (9) No change.
Rulemaking Authority 213.06(1), 220.183(4)(d), 288.99(11), 624.5105(4)(b), 1002.395(13) FS. Law Implemented 175.101, 175.1015, 175.121, 175.141, 185.08(3), 185.085, 185.10, 185.12, 213.05, 213.235, 220.183(3), 288.99(11), 624.4621, 624.46226, 624.4625, 624.475, 624.509, 624.5092, 624.50921, 624.510, 624.5105, 624.51055, 624.511, 624.518, 624.519, 624.520(2), 626.7451(11), 627.3512, 627.357(9), 628.6015, 629.5011, 634.131, 634.313(2), 634.415(2), 1002.395 FS. History–New 2-3-80, Formerly 12B-8.01, Amended 3-25-90, 4-10-91, 2-18-93, 6-16-94, 10-19-94, 1-2-96, 12-9-97, 6-2-98, 4-2-00, 10-15-01, 8-1-02, 6-20-06, 9-1-09, 4-26-10, 6-6-11, .
12B-8.0012 Insurance Policy Surcharge; Rate and Computation.
(1) Every insurer must collect a surcharge of $2 and $4 from the policyholders of certain types of property insurance issued or renewed on or after May 1, 1993. The proceeds will be deposited into the Emergency Management, Preparedness, and Assistance Trust Fund.
(2) The $2 surcharge applies to each residential dwelling fire policy, homeowner’s, mobile homeowner’s, tenant homeowner’s, condominium unit owner’s, and any other type of insurance coverage on residential property, issued or renewed on or after May 1, 1993.
(3) The $4 surcharge applies to each commercial fire, commercial multiple peril, and business owner’s property insurance policy issued or renewed on or after May 1, 1993, including marine policies if the coverage includes real property.
(4) through (14) No change.
Rulemaking Specific Authority 213.06(1) FS., Ch. 93-128, L.O.F. Law Implemented 624.5092 FS., Ch. 93-128, L.O.F. History–New 6-16-94, Amended 6-20-06,________.
12B-8.003 Tax Statement; Overpayments.
(1) Tax returns and reports shall be made by insurers on forms prescribed by the Department. These forms are hereby incorporated by reference in this rule.
(2) No change.
(3) The prescribed forms shall be sworn by one or more of the executive officers or attorney (if reciprocal insurer) of the insurer making the return, by signing the return after attesting to the following:
“Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief it is true, correct and complete. If prepared by a person other than the taxpayer, this declaration is based on all information of which the preparer has any knowledge [Section 92.525(1)(b), F.S.].” Tax returns and accompanying data will be maintained by the Department for purposes of analysis and audit.
(3)(4) No change.
Form Number Title Effective Date
(4)(5)(a) DR-907 Florida Insurance Premium
Installment Payment
(R. 01/12 01/11) ___ 01/11
(b) DR-907N Information for Filing Insurance
Premium Installment Payment
(Form DR-907) (R. 01/12 01/11) ___ 01/11
(5)(6)(a) DR-908 Insurance Premium Taxes and Fees
Return for Calendar Year 20112010
(R. 01/12 01/11) ___ 01/11
(b) DR-908N Instructions for Preparing Form
DR-908 Florida Insurance Premium
Taxes and Fees Return (R. 01/12 01/11) ___ 01/11
(6)(7) DR-350900 2011 2010 Insurance Premium Tax
Information for Schedules XII and XIII,
DR-908 (R. 01/12 01/11) ___ 01/11
Rulemaking Authority 213.06(1) FS. Law Implemented 92.525, 175.041, 175.101, 175.1015, 175.111, 175.121, 175.141, 175.151, 185.02, 185.03, 185.08, 185.085, 185.09, 185.10, 185.12, 185.13, 213.05, 213.053, 213.235, 213.37, 220.183, 220.19, 220.191, 252.372, 288.99, 440.51, 443.1216, 624.11, 624.402, 624.4072, 624.4094, 624.4621, 624.4625, 624.475, 624.501, 624.509, 624.5091, 624.5092, 624.50921, 624.510, 624.5105, 624.5107, 624.511, 624.515, 624.516, 624.518, 624.519, 624.520, 624.521, 624.601, 624.610, 626.7451(11), 627.311, 627.351, 627.3512, 627.357(9), 627.7711, 627.943, 628.6015, 629.401, 629.5011, 631.72, 632.626, 634.131, 634.313(2), 634.415(2), 636.066, 642.0301, 642.032, FS., Ch. 93-128, s. 29, Ch. 2005-280, L.O.F. History–New 2-3-80, Formerly 12B-8.03, Amended 3-25-90, 3-10-91, 2-18-93, 6-16-94, 12-9-97, 3-23-98, 7-1-99, 10-15-01, 8-1-02, 5-4-03, 9-28-04, 6-28-05, 6-20-06, 4-5-07, 1-1-08, 1-27-09, 1-11-10, 1-12-11,________.
12B-8.006 State Fire Marshal Regulatory Assessment and Surcharge; Levy and Amount.
(1) through (4) No change.
(5) The surcharge imposed under Section 624.515(2), F.S., shall be deposited by the Department of Revenue, when received and audited, into the Fire College Trust Fund.
Rulemaking Authority 213.06(1) FS. Law Implemented 213.05, 624.509, 624.510, 624.511, 624.515, 624.516 FS. History–New 2-3-80, Formerly 12B-8.06, Amended 4-10-91, 2-18-93, 12-9-97, 7-31-03, 12-25-08,________.
12B-8.007 Deposit of Certain Tax Receipts; Refund of Improper Payments.
Rulemaking Specific Authority 20.21(5) FS. Law Implemented 624.521 FS. History–New 2-3-80, Formerly 12B-8.07, Repealed________.
12B-8.016 Retaliatory Provisions.
(1) through (2) No change.
(3)(a) Other items which shall be included in the retaliatory calculations are:
1. The excise taxes imposed under Sections 175.101 and 185.08, F.S., as well as comparable taxes in other states.
2. The State Fire Marshal Regulatory Assessment imposed under Section 624.515, F.S., as well as comparable assessments in other states.
3. The Florida corporate income tax (CIT) imposed under Chapter 220, F.S., and the emergency excise tax imposed under Chapter 221, F.S., as well as comparable taxes in other states. Insurers must should always use the prior year’s taxable income and resulting CIT liability when calculating Florida’s aggregate taxes. However, the insurer must should use the income from the taxable year applicable for calculating any CIT in its state of incorporation. Such taxable years may vary depending upon the individual state’s taxing statutes. These taxable years may reflect the prior year’s taxable income or the current year’s taxable income.
4. through 6. No change.
7. Any credits obtained prior to January 1, 1990, pursuant to the provisions of Section 624.5105, F.S.
(b) through (c) No change.
(4) The For the years 1997 and after, the amount of any deduction against premium taxes granted under Section 440.51, F.S., as well as comparable deductions in other states shall be added back to net premium taxes.
(5) For purposes of this rule, the corporate income tax return (CIT) imposed under Chapter 220, F.S., and the emergency excise tax (EET) imposed under Chapter 221, F.S., is the amount of CIT and EET used to compute the corporate income and emergency excise tax credit in Rule 12B-8.001, F.A.C.
Rulemaking Authority 213.06(1) FS. Law Implemented 213.05, 624.509, 624.5091, 624.5092 FS. History–New 3-25-90, Amended 4-10-91, 12-9-97, 3-23-98, 10-15-01, 6-1-09,________.