Fla. Admin. Code Ann. R. 12B-8.001 [Effective 1/1/2024] Premium Tax; Rate and Computation

• Library: Florida Administrative Code
• Edition: 2023
• Currency: Current through Reg. 49, No. 248; December 26, 2023
• Citation: Fla. Admin. Code Ann. R. 12B-8.001
• Year: 2023

(1) A tax is imposed on insurance premiums or assessments, including membership fees, finance charges, 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. Such tax is imposed no matter whether the insurer possesses a valid Florida certificate of authority, if the issuing or collecting insurer would have been required to obtain a certificate of authority prior to issuing these policies and contracts or collecting premiums on them. The administration, auditing, collection, and enforcement of the insurance premium taxes and assessments are vested in the Department of Revenue, with the exception of taxes under Chapters 175 and 185, F.S., where the Department's only functions are collection and maintenance of a database. "Policies and premiums" respectively mean and include those policies or other contracts or agreements effecting and evidencing insurance, and premiums and other considerations for such policies as described and contemplated by the provisions of Sections undefinedundefined624.509 and undefinedundefined624.510, F.S.; or any other sections subject to the provisions of Section undefinedundefined624.509, F.S. Per-policy fees charged under Section 626.7451(11), F.S., by licensed managing general agents fall under the definition of "premiums" as defined in Section undefinedundefined627.403, F.S., and are subject to premium tax as set forth in Section undefinedundefined624.509, F.S.

(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. Life and health insurance policies covering Florida residents. 2. Policies and contracts covering property subjects, or risks located, resident, or to be performed in Florida (except annuity policies and contracts). 3. Reciprocal insurance under Chapter 629, F.S. 4. Prepaid limited health services contracts issued under Chapter 636, F.S. 5. Insurance issued by a risk retention group certified in Florida under Part XIX Chapter 627, F.S. 6. Insurance issued by a legal expense insurance corporation under Chapter 642 F.S. 7. Insurance issued by a captive or industrial captive insurer under Part V, Chapter 628, F.S. 8. Surety insurance issued by a licensed surety company. 9. Insurance issued by a joint underwriting association (JUA) or joint underwriting plan (JUP) under Part I, Chapter 627, F.S. Note: Each JUA/JUP may elect to pay premium taxes on the premiums received on its behalf or may elect to have the member insurers to whom the premiums are allocated pay the premium taxes where the member insurer had written the policy. The JUA/JUP is required to notify the member insurers and the Department of Revenue by January 15 of each year concerning how these taxes are to be treated. Notification to the Department of Revenue must be in the form of a letter stating its intentions. The letter is to be attached to the Insurance Premium Tax Return, Form DR-908. Additionally JUA/JUP's which elect to pay the tax must file an Insurance Premium Tax Return Form DR-908, by March 1 of each year to report the association's or plan's premium receipts and to remit the tax. These tax returns will be considered amended returns if they are the second return of the taxable year for the JUA/JUP. The first return is the January 15 notification. However, if the JUA/JUP is able to file a complete return and remit any required tax by the January 15 notification date, a subsequent return is not required.

(b) Annuity policies or contracts. A tax at the rate of 1 percent shall be applied on the gross receipts on annuity policies or contracts paid by holders thereof in Florida. 1. 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 annuity holders. 2. As used in this subsection, the term "holders" shall include employers contributing to an employee's pension, annuity, or profit sharing plan. 3. This tax is assessed and must be accrued by the insurer when the annuity premium is received, not when the annuity benefits are due and payable or when the annuity is otherwise terminated. For the purposes of this subparagraph, annuity premiums are received when consideration is remitted by one wishing to purchase an annuity contract and is subsequently accepted by an insurer as payment for the issuance of an annuity contract to a named individual annuitant. Such remittances may either be in the form of a lump sum payment or a series of payments. Each payment is subject to the tax described in this section.

(c) 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 undefinedundefined624.475, F.S. 2. Group self-insurance fund under Section undefinedundefined624.4621, 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 undefinedundefined627.357, F.S. 2. Assessable Mutual Insurers under Section 628.6015, F.S. 3. Corporation Not for Profit Self-Insurance Funds under Section undefinedundefined624.4625, F.S. 4. Public Housing Authorities Self-Insurance Funds under Section undefinedundefined624.46226, F.S.

(e) Dividends payable under insurance policies that, at the option of the holders of such policies, are applied to purchase paid-up additions, are not additional gross receipts of the insurer for purposes of the insurance premium tax contained in Section undefinedundefined624.509, F.S.

(2) Installments of tax. An estimated tax shall be filed on April 15, June 15, and October 15 of each year which shows the estimated amount of tax due for the preceding quarter, except the June 15 installment shall be for the period ending June 30; payment of that estimated amount shall be made at the time the report is filed. No credit for any of the allowable credits may be made against the insurer's premium tax until the annual premium tax return is filed. Taxpayers may not credit any estimated tax payments against their estimated premium tax. Any estimated payment credits not taken when available cannot be carried forward or carried back. On or before March 1 in each year, an annual return shall be filed showing, by quarters, the gross amount of receipts taxable for the preceding year and the installment payments made during the year. A final payment of tax due for that year shall be made at the time the taxpayer files his annual return. A 10 percent penalty shall be imposed on any underpayment or late payment due and payable with the annual return. Installments of tax are applicable to taxes imposed by Sections undefinedundefined175.101, undefinedundefined185.08, undefinedundefined252.372, undefinedundefined624.4621, 624.475, undefinedundefined624.509, undefinedundefined624.510, undefinedundefined624.515, 627.357, undefinedundefined628.6015, undefinedundefined629.5011 and undefinedundefined636.066, F.S.

(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 90 percent is 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) 1. Contributions to eligible nonprofit scholarship-funding organizations (SFOs) for insurance premium tax reduce the amount required to meet the prior year exception referenced in paragraph (a). For taxable years beginning before January 1, 2019, the specific prior year exception amount reduced by a contribution to an...