AB 2734, as introduced, Committee on Insurance. Insurance: prepayment of taxes.
Existing law requires every surplus line broker whose annual tax for the preceding calendar year was $5,000 or more to make monthly installment payments on account of the annual tax on business done during the calendar year, and authorizes the Insurance Commissioner to relieve a surplus line broker of his or her obligations to make monthly payments if the broker establishes to the commissioner’s satisfaction that he or she has ceased to transact business in the state, or his or her annual tax for the current year will be less than $5,000.
This bill would raise the threshold for making monthly installment payments to $20,000 or more in annual tax for the preceding calendar year, and would authorize the commissioner to relieve a surplus line broker of his or her obligations to make monthly payments if his or her annual tax for the current year would be less than $20,000.
Existing law requires insurers transacting insurance in this state whose annual tax for the preceding calendar year was $5,000 or more to make prepayments of the annual tax for the current calendar year, except as provided. The commissioner is authorized to relieve an insurer of its obligations to make prepayments if the insurer establishes to the commissioner’s satisfaction that the insurer has ceased to transact business in the state, or the insurer’s annual tax for the current year will be less than $5,000.
This bill would raise the threshold for making tax prepayments to $20,000 or more in annual tax for the preceding calendar year, and would authorize the commissioner to relieve an insurer of its obligations to make prepayments if the insurer’s annual tax for the current year would be less than $20,000.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 1775.1 of the Insurance Code is amended
2to read:
(a) For the calendar year 1995, and each calendar year
4thereafter, every surplus line broker whose annual tax for the
5preceding calendar year wasbegin delete five thousand dollars ($5,000)end deletebegin insert twenty
6thousand dollars ($20,000)end insert or more shall make monthly installment
7payments on account of the annual tax on business done during
8the current calendar year imposed by Section 1775.5.
9(b) Notwithstanding any otherbegin delete provision,end deletebegin insert
law,end insert the commissioner
10may relieve a surplus line broker of his or her obligation to make
11monthly paymentsbegin delete whereend deletebegin insert
ifend insert the broker establishes to the satisfaction
12of the commissioner that either the broker has ceased to transact
13business in this state, or his or her annual tax for the current year
14will be less thanbegin delete five thousand dollars ($5,000)end deletebegin insert twenty thousand
15dollars ($20,000)end insert.
Section 12251 of the Revenue and Taxation Code, as
17added by Section 13 of Chapter 33 of the Statutes of 2013, is
18amended to read:
(a) For the calendar year 1970, and each calendar year
20thereafter, insurers transacting insurance in this state and whose
21annual tax for the preceding calendar year wasbegin delete five thousand dollars begin insert twenty thousand dollars ($20,000)end insert or more shall make
22($5,000)end delete
23prepayments of the annual tax for the current calendar year imposed
24by Section 28 of Article XIII of the California Constitution and
P3 1this part, provided thatbegin delete noend delete prepayments shallbegin insert notend insert be made with
2respect
to the tax on ocean marine insurance underwriting profit
3or any retaliatory tax.
4(b) This section shall become operative on July 1, 2013.
Section 12260 of the Revenue and Taxation Code, as
6added by Section 28 of Chapter 33 of the Statutes of 2013, is
7amended to read:
(a) Notwithstanding any other provision of this article,
9the commissioner may relieve an insurer of its obligation to make
10prepaymentsbegin delete whereend deletebegin insert ifend insert the insurer establishes to the satisfaction of
11the commissioner that either the insurer has ceased to transact
12insurance in this state, or the insurer’s annual tax for the current
13year will be less thanbegin delete five thousand dollars ($5,000)end deletebegin insert twenty
14thousand dollars ($20,000)end insert.
15(b) This section shall become operative on July 1, 2013.
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