96-174
Response
December 2, 1996
Request
Mr.
XXXXX, Chairman
Office
of the Commission
Utah
State Tax Commission
210
North 1950 West
Salt
Lake City, Utah 84134
Dear
XXXXX:
It
was nice to visit with you last week and tour the inner workings of the Utah
State Tax Commission.
As
you suggested I am reducing to writing the tax issue we discussed regarding the
XXXXX for the Olympic Winter Games of 2002.
The question is:
Since
XXXXX is a 501-c-3 organization we would like to explore an issue of exempting
XXXXX from the payment of Utah State Premium taxes for property and casualty
programs, surplus line programs, Workers Compensation and Employee Benefits?
We
thank you and your team for investigating options and opinions regarding this
issue.
Sincerely,
XXXXX
XXXXX
Advisory
Opinion - Premium Tax
Dear
XXXXX,
We have received your request for
information about the insurance premium tax.
We offer the following tax advice.
Every insurer who is admitted to do
business in Utah is subject to premium tax on total premiums received for the
purpose of covering property or other risks in Utah. Utah Code Ann. §59-9-101.
This premium tax applies to worker’ compensation insurance, property
risks and casualty insurance. It does
not apply to certain health insurance premiums. (Copy of statute enclosed.)
The premium tax imposed by this section of the tax Code is paid by the
insurer, not the policyholder.
A premium tax is also imposed on
surplus lines coverage. Utah Code Ann.
§§31A-3-301 - 31A-3-303. Unlike the
premium tax discussed above, the surplus lines premium tax is administered by
the Insurance Department of Insurance.
The surplus lines tax is imposed on the insured, but the policyholder
and the broker are jointly and severally liable for payment of the surplus
lines tax. (Copy of statutes and rules
enclosed.)
The Salt Lake Organizing Committee’s
status as a non-profit organization does not exempt XXXXX insurer from the
premium tax set out in section 59-9-101 of the Tax Code. With regard to the surplus lines premium
tax, we see no exemption for nonprofit organizations. However, you may wish to contact Vanna Hunter of the Insurance Department
at XXXXX to confirm this information.
Please let us know if we can be of
further assistance.
For
the Commission,
Joe
B. Pacheco,
Commissioner