An Act To Phase Out the Insurance Premium Tax on Annuities
Sec. 1. 36 MRSA §2513, first ¶, as amended by PL 2011, c. 331, §12 and affected by §§16 and 17, is further amended to read:
Every Except as provided in section 2513-C, every insurance company or association that does business or collects premiums or assessments including annuity considerations in the State, including surety companies and companies engaged in the business of credit insurance or title insurance, shall, for the privilege of doing business in this State and in addition to any other taxes imposed for that privilege, pay a tax upon all gross direct premiums including annuity considerations, whether in cash or otherwise, on contracts written on risks located or resident in the State for insurance of life, annuity, fire, casualty and other risks at the rate of 2% a year. Every nonadmitted insurer that does business or collects premiums in the State shall, for the privilege of doing business in this State and in addition to any other taxes imposed for that privilege, pay a tax upon all gross direct premiums, whether in cash or otherwise, as provided in section 2531. For purposes of this section chapter, the term "annuity considerations" includes amounts paid to an insurance company for the purchase of a contract that may result in an annuity, even if the annuitization never occurs or does not occur until some time in the future and the amounts are in the meantime applied to an investment vehicle other than an annuity. This section does not apply to mutual fire insurance companies subject to tax under section 2517 or to captive insurance companies formed or licensed under Title 24-A, chapter 83 or under the laws of another state.
Sec. 2. 36 MRSA §2513-C is enacted to read:
§ 2513-C. Phase out of tax on annuity considerations
Notwithstanding the other provisions of this chapter, the rate of tax under this chapter for annuity considerations is 1.5% in 2018, 1% in 2019 and 0.5% in 2020. Beginning in 2021, annuity considerations are not subject to tax under this chapter, but taxes due for previous years may be collected.
This bill phases out the insurance premium tax on annuity considerations over 4 years beginning in 2018. Annuity considerations are no longer subject to insurance premium tax beginning in 2021.