12B-8.016. Retaliatory Provisions

(1) When by or pursuant to the laws of any other state or foreign country any taxes, licenses, and other fees, in the aggregate, and any fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions are or would be imposed upon Florida insurers or upon the agents or representatives of such insurers which are in excess of such taxes, licenses, and other fees, in the aggregate, or which are in excess of the fines, penalties, deposit requirements, or other obligations, prohibitions, or restrictions directly imposed upon similar insurers, or upon the agents or representatives of such insurers, of such other state or country under the statutes of this state, so long as such laws of such other state or country continue in force or are so applied, the same taxes, licenses, and other fees, in the aggregate, or fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions of whatever kind shall be imposed by the department upon the insurers, or upon the agents or representatives of such insurers, of such other state or country doing business or seeking to do business in this state.

(2) In determining the retaliatory taxes to be imposed, the net premium tax is used as a starting point. Eighty percent of the salary credit provided by Section 624.509(5), F.S., shall be added back to the State of Florida portion of the net premium tax for retaliatory calculations only.

(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., as well as comparable taxes in other states. Insurers must use the prior year’s taxable income and resulting CIT liability when calculating Florida’s aggregate taxes. However, the insurer must 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. Deductions from premium taxes or other taxes otherwise payable, allowed because of real estate or personal property taxes paid.

5. That portion of the Florida Insurance Guarantee Association assessment that was imposed upon the insurer’s property insurance policies, as such insurance is defined in Section 624.604, F.S. Likewise, if the state of domicile would impose a comparable assessment on a similar Florida insurer the foreign or alien insurer must include that portion of the state of domicile’s assessment that would relate to the similar insurer’s property insurance premiums.

a. For purposes of calculating a foreign or alien insurer’s includable portion of its Florida Insurance Guarantee Association assessment, such insurer should take the amount of premiums which can be classified as property insurance under Section 624.604, F.S., that are subject to the assessment and divide them by the total premiums subject to the assessment. The resulting percentage would then be multiplied by the insurer’s Florida Insurance Guarantee Association assessment to determine the portion of the assessment that may be added back for retaliatory tax purposes. This process is completed for each Florida Insurance Guarantee Association assessment.

b. The Florida Insurance Guarantee Association assessments to be used in the calculations, as well as the state of domicile’s comparable assessment retaliatory tax add backs, if any, are those assessments due and payable during the taxable year.

6. Any other taxes, licenses, fees, fines, penalties, deposit requirements, material obligations, prohibitions, or restrictions which are or would be imposed upon Florida insurers or upon the agents or representatives of such insurers doing business in the foreign insurers’ state of domicile, or upon foreign insurers or the agents or representatives of such insurers doing business in Florida, except for:

a. Personal income taxes.

b. Sales and use taxes.

c. Ad valorem taxes on real or personal property.

d. Special purpose obligations or assessments imposed in connection with particular kinds of insurance other than property insurance.

e. Reimbursement premiums paid to the Florida Hurricane Catastrophe Fund.

f. Emergency assessments paid to the Florida Hurricane Catastrophe Fund.

(b) Special purpose obligations as used in this rule means those obligations or assessments the funds from which are for the benefit of certain parties, and not for the benefit of all citizens generally. Generally, such obligations will not materially involve general tax revenues, appropriated funds or state monies.

1. Using this definition, the following Florida assessments, as they are currently described in the Florida Statutes, would be considered special purpose obligations:

a. Workers’ compensation administrative assessment.

b. Workers’ compensation special assessment.

c. Florida Life and Health Guarantee Association assessment.

d. Florida Insurance Guarantee Association assessment.

e. Florida Comprehensive Health Association assessment.

f. State Fire Marshal regulatory assessment.

g. State Fire Marshal college surcharge.

2. Since Section 624.5091(3), F.S., provides that special purpose obligations or assessments imposed in connection with particular kinds of insurance other than property insurance are to be excluded from the retaliatory tax calculation, only the State Fire Marshal regulatory assessment, the State Fire Marshal college surcharge, and the portion of the Florida Insurance Guarantee Association assessment that was imposed upon the insurer’s property insurance policies, can be included in the retaliatory tax calculation. The workers’ compensation fund’s administrative and special purpose assessments, and the Florida Life and Health Guarantee Association assessment cannot be included in the retaliatory tax calculation, since the assessments are imposed on insurance other than property insurance. NOTE: The $2 and $4 surcharge imposed under Section 252.372, F.S., is not to be included in the retaliatory tax calculation, since it is imposed on the insured.

(c) Taxes in other states shall be computed using the tax laws of those states, but shall be based on the insurer’s Florida premium volume, personnel, and property.

(4) 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.

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, 1-25-12.