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[Utah Code Table of Contents]
[TITLE 59. Table of Contents]
59-9-101 Tax basis - Rates - Exemptions.
(1) (a) Except for annuity considerations, insurance premiums paid by institutions within the state system of higher education as specified in Section 53B-1-102 , and ocean marine insurance, every admitted insurer shall pay to the commission on or before March 31 in each year, a tax of 2-1/4% of the total premiums received by it during the preceding calendar year from insurance covering property or risks located in this state.
(b) This Subsection (1) does not apply to:
(i) workers' compensation insurance, assessed under Subsection (2); and
(ii) title insurance premiums taxed under Subsection (3).
(c) The taxable premium under this Subsection (1) shall be reduced by:
(i) all premiums returned or credited to policyholders on direct business subject to tax in this state;
(ii) all premiums received for reinsurance of property or risks located in this state; and
(iii) the dividends, including premium reduction benefits maturing within the year, paid or credited to policyholders in this state or applied in abatement or reduction of premiums due during the preceding calendar year.
(2) (a) Every admitted insurer writing workers' compensation insurance in this state, including the Workers' Compensation Fund created under Title 31A, Chapter 33, Workers' Compensation Fund, shall pay to the tax commission, on or before March 31 in each year, a premium assessment of between 1% and 8% of the total workers' compensation premium income received by the insurer from workers' compensation insurance in this state during the preceding calendar year.
(b) Total workers' compensation premium income means the net written premium as calculated before any premium reduction for any insured employer's deductible, retention, or reimbursement amounts and also those amounts equivalent to premiums as provided in Section 34A-2-202 .
(c) The percentage of premium assessment applicable for a calendar year shall be determined by the Labor Commission under Subsection (2)(d). The total premium income shall be reduced in the same manner as provided in Subsections (1)(c)(i) and (1)(c)(ii), but not as provided in Subsection (1)(c)(iii). The tax commission shall promptly remit from the premium assessment collected under Subsection (2):
(i) an amount of up to 7.25% of the premium income to the state treasurer for credit to the Employers' Reinsurance Fund created under Subsection 34A-2-702 (1);
(ii) an amount equal to 0.25% of the premium income to the state treasurer for credit to the restricted account in the General Fund, created by Section 34A-2-701 ; and
(iii) an amount of up to 0.50% and any remaining assessed percentage of the premium income to the state treasurer for credit to the Uninsured Employers' Fund created under Section 34A-2-704 .
(d) (i) The Labor Commission shall determine the amount of the premium assessment for each year on or before each October 15 of the preceding year. The Labor Commission shall make this determination following a public hearing. The determination shall be based upon the recommendations of a qualified actuary.
(ii) The actuary shall recommend a premium assessment rate sufficient to provide payments of benefits and expenses from the Employers' Reinsurance Fund and to project a funded condition with assets greater than liabilities by no later than June 30, 2025.
(iii) The actuary shall recommend a premium assessment rate sufficient to provide payments of benefits and expenses from the Uninsured Employers' Fund and to maintain it at a funded condition with assets equal to or greater than liabilities.
(iv) At the end of each fiscal year the minimum approximate assets in the Employers' Reinsurance Fund shall be $5,000,000 which amount shall be adjusted each year beginning in 1990 by multiplying by the ratio that the total workers' compensation premium income for the preceding calendar year bears to the total workers' compensation premium income for the calendar year 1988.
(v) The requirements of Subsection (2)(d)(iv) cease when the future annual disbursements from the Employers' Reinsurance Fund are projected to be less than the calculations of the corresponding future minimum required assets. The Labor Commission shall, after a public hearing, determine if the future annual disbursements are less than the corresponding future minimum required assets from projections provided by the actuary.
(vi) At the end of each fiscal year the minimum approximate assets in the Uninsured Employers' Fund shall be $2,000,000, which amount shall be adjusted each year beginning in 1990 by multiplying by the ratio that the total workers' compensation premium income for the preceding calendar year bears to the total workers' compensation premium income for the calendar year 1988.
(e) A premium assessment that is to be transferred into the General Fund may be collected on premiums received from Utah public agencies.
(3) Every admitted insurer writing title insurance in this state shall pay to the commission, on or before March 31 in each year, a tax of .45% of the total premium received by either the insurer or by its agents during the preceding calendar year from title insurance concerning property located in this state. In calculating this tax, "premium" includes the charges made to an insured under or to an applicant for a policy or contract of title insurance for:
(a) the assumption by the title insurer of the risks assumed by the issuance of the policy or contract of title insurance; and
(b) abstracting title, title searching, examining title, or determining the insurability of title, and every other activity, exclusive of escrow, settlement, or closing charges, whether denominated premium or otherwise, made by a title insurer, an agent of a title insurer, a title insurance producer, or any of them.
(4) Beginning July 1, 1986, former county mutuals and former mutual benefit associations shall pay the premium tax or assessment due under this chapter. All premiums received after July 1, 1986, shall be considered in determining the tax or assessment.
(5) The following insurers are not subject to the premium tax on health care insurance that would otherwise be applicable under Subsection (1):
(a) insurers licensed under Title 31A, Chapter 5, Domestic Stock and Mutual Insurance Corporations;
(b) insurers licensed under Title 31A, Chapter 7, Nonprofit Health Service Insurance Corporations;
(c) insurers licensed under Title 31A, Chapter 8, Health Maintenance Organizations and Limited Health Plans;
(d) insurers licensed under Title 31A, Chapter 9, Insurance Fraternals;
(e) insurers licensed under Title 31A, Chapter 11, Motor Clubs;
(f) insurers licensed under Title 31A, Chapter 13, Employee Welfare Funds and Plans; and
(g) insurers licensed under Title 31A, Chapter 14, Foreign Insurers.
(6) An insurer issuing multiple policies to an insured may not artificially allocate the premiums among the policies for purposes of reducing the aggregate premium tax or assessment applicable to the policies.
(7) The retaliatory provisions of Title 31A, Chapter 3,
Department Funding, Fees, and Taxes, apply to the tax or
assessment imposed under this chapter.
2003
59-9-101.3 Employers' Reinsurance Fund special assessment.
(1) For purposes of this section:
(a) "Calendar year" means a time period beginning January 1 and ending December 31 during which an assessment is imposed.
(b) "Public agency insurance mutual" is as defined in Section 31A-1-103 .
(c) "Total workers' compensation premium income" has the same meaning as under Subsection 59-9-101 (2).
(d) "Self-insured employer" is as defined in Section 34A-2-201.5 .
(2) (a) For calendar years beginning on January 1, 2002, through December 31, 2004, the following shall pay to the commission, on or before March 31 of each year, an assessment imposed by the Labor Commission under Subsection (3):
(i) an admitted insurer writing workers' compensation insurance in this state, including the Workers' Compensation Fund created under Title 31A, Chapter 33, Workers' Compensation Fund;
(ii) a public agency insurance mutual that is authorized under Sections 34A-2-201 and 34A-2-201.5 to pay workers' compensation direct; and
(iii) an employer authorized under Sections 34A-2-201 and 34A-2-201.5 to pay workers' compensation direct.
(b) The assessment imposed under Subsection (3) shall be in addition to:
(i) the premium assessment imposed under Subsection 59-9-101 (2); and
(ii) the assessment imposed under Section 34A-2-202 .
(3) (a) If the conditions described in Subsection (3)(b) are met, the Labor Commission may impose an assessment in accordance with Subsections (3)(c) and (d) of up to 2% of:
(i) the total workers' compensation premium income received by the insurer from workers' compensation insurance in this state during the preceding calendar year; or
(ii) if authorized under Sections 34A-2-201 and 34A-2-201.5 to pay workers' compensation direct, the amount calculated under Section 34A-2-202 for a self-insured employer that is equivalent to the total workers' compensation premium income.
(b) The Labor Commission may impose the assessment described in Subsection (3)(a) if:
(i) the Labor Commission determines that:
(A) all admitted insurers writing workers' compensation insurance in this state shall pay the maximum 7.25% of the premium income under Subsection 59-9-101 (2)(c)(i); and
(B) all self-insured employers shall pay the maximum 7.25% assessment under Section 34A-2-202 ; and
(ii) the maximum 7.25% of the premium income is insufficient to:
(A) provide payment of benefits and expenses from the Employers' Reinsurance Fund to project a funded condition of the Employers' Reinsurance Fund with assets greater than liabilities by no later than June 30, 2025; or
(B) maintain the minimum approximate assets required in Subsection 59-9-101 (2)(d)(iv).
(c) On or before each October 15 of the preceding year and following a public hearing, the Labor Commission shall determine:
(i) whether an assessment will be imposed under this section for a calendar year; and
(ii) if the assessment will be imposed, the percentage of the assessment applicable for the calendar year.
(d) The Labor Commission shall:
(i) base its determination on the recommendations of the qualified actuary required in Subsection 59-9-101 (2)(d)(i); and
(ii) take into consideration the recommended premium assessment rate recommended by the actuary under Subsection 59-9-101 (2)(d)(ii).
(4) An employer shall aggregate all assessments imposed under this section and Section 34A-2-202 or 59-9-101 to determine whether the total assessment obligation shall be paid in quarterly installments in accordance with Sections 34A-2-202 and 59-9-104 .
(5) The commission shall promptly remit the assessment
collected under Subsection (2) to the state treasurer for
credit to the Employers' Reinsurance Fund created under Section
34A-2-702
.
2002
59-9-102 Offsets.
(1) If any authorized insurer doing business in this state during the tax year pays a property tax in this state, the insurer may deduct from the tax provided under this chapter that portion of the property tax paid for general state purposes.
(2) Any domestic insurance company paying a fee for examination under Section 31A-2-205 may deduct from the tax provided under this chapter the amount of the examination fee paid, subject to the limitations of Subsection 31A-2-203 (2) (d).
(3) There is offset against the taxes imposed under Section 59-9-101 the amount of any assessments paid by an insurance company under the guaranty associations established under Title 31A, Chapter 28, in the manner provided by Sections 31A-28-113 and 31A-28-212 .
(4) The state has no liability to insurers for any amount
by which offsets allowed under this section exceed the insurer's
premium tax liability.
1987
59-9-103 Taxation of insurers otherwise untaxed.
(1) As used in this section:
(a) "Administrative and claims expense" includes all claims paid, agency expenses, third party administrator expenses, taxes, licenses, fees, loss adjustment expenses, legal expenses, reinsurance premiums, and all other expenses incurred directly in connection with the insurance of Utah risks by the insurer, less any recoveries or reimbursements collected or collectible because of reinsurance or any other source, but only with respect to Utah risks. The administrative and claims expense also includes the pro rata portion attributable to Utah risks of the salaries and fringe benefits, including taxes on salaries, of all personnel responsible for the administration of the insurer, the printing and stationery, and all other expenses attributable to the administration of the insurer. When personnel are engaged in the administration of the insurer as only part of their employment, for purposes of this section their salaries and fringe benefits shall be prorated based on the portion of their time devoted to the administration of the insurer. Appropriate overhead charges shall be included with all the expenses listed in this subsection.
(b) "Utah risks" means insurance coverage on the lives, health, or against the liability of persons residing in Utah, or on property located in Utah, other than property temporarily in transit through Utah.
(2) Except for workers' compensation coverage, which is provided in Subsection (3), and except as provided under Subsection (4), every insurer which provides insurance on Utah risks shall pay to the commission, on or before March 31 of each year, a tax of 2-1/4% of the total administrative and claims expense incurred during the prior calendar year by the insurer. This tax shall be deposited in the General Fund.
(3) Except as provided under Subsection (4), every insurer which provides workers' compensation coverage on persons employed in Utah shall pay to the commission on or before March 31 of each year a tax of 3-1/4% of the total administrative and claims expense incurred during the prior year by the insurer. This tax shall be distributed in the same manner as under Subsection 59-9-101 (2).
(4) The taxes imposed under Subsections (2) and (3) do not apply to:
(a) admitted insurers;
(b) insurers taxed under Section 31A-3-301 ;
(c) self insurers;
(d) annuity considerations or ocean marine insurance; or
(e) a public agency insurance mutual as defined in Section
31A-1-103
.
2002
59-9-104 Installment payments - Penalty.
(1) A person whose total tax obligation under this chapter for the preceding taxable year was $10,000 or more shall pay the taxes levied under this chapter in quarterly installments. Each installment shall be based on the estimated insurance premiums received, or for the taxes imposed under Section 59-9-103 , upon the estimated total administrative and claims expense incurred during the calendar quarter preceding the date on which that quarterly installment is due. The installments are due on or before April 30, July 31, October 31, and March 31. To the extent installment payments result in an overpayment of the tax obligation under this chapter, the overpayment shall be promptly refunded.
(2) If an installment is not paid or is underpaid, except as provided in Subsection (3), there shall be added a penalty at the rate and in the manner prescribed in Section 59-1-401 . The amount of the underpayment is the excess of 80% of the installment shown to be due by an audit of the taxpayer's records over the amount, if any, of the installment paid on or before the last date prescribed for the payment. The taxpayer shall pay the cost of the audit, if any.
(3) No penalty, interest, or audit charge may be assessed under Subsection (2) if the taxpayer pays, for any installment required by this section, at least 27% of the annual tax reported on its annual statement for the preceding taxable year.
(4) There shall be no interest added to any estimated
tax payments subject to a penalty under this section.
1995
59-9-105 Tax on certain insurers to pay for relative value study and other publications or services.
(1) Each insurer providing coverage for motor vehicle liability, uninsured motorist, and personal injury protection shall pay to the State Tax Commission on or before March 31 of each year, a tax of .01% on the total premiums received for these coverages during the preceding calendar year from policies covering motor vehicle risks in this state.
(2) The taxable premium under this section shall be reduced by all premiums returned or credited to policyholders on direct business subject to tax in this state.
(3) All money received by the state under this section shall be deposited in the General Fund as a dedicated credit for the purpose of providing funds to pay for any costs and expenses incurred by the Insurance Department:
(a) in conducting, maintaining, and administering the relative value study referred to in Section 31A-22-307 ;
(b) to prepare, publish, and distribute publications relating to insurance and consumers of insurance as provided in Section 31A-2-208 ; and
(c) in providing the services of the Insurance Department through the use of:
(i) electronic commerce; and
(ii) other information technology.
2002
59-9-106 Assessment of taxes - Action for collection of tax - Limit for refund or credit of tax.
(1) (a) Except as provided in Subsections (2) through (5), the commission shall assess a tax under this chapter, and any penalties and interest, within three years after a taxpayer files a return.
(b) Except as provided in Subsections (2) through (5), if the commission does not make an assessment under this chapter within the three-year period provided in Subsection (1)(a), the commission may not commence a proceeding to collect the tax after the expiration of the three-year period.
(2) Notwithstanding Subsection (1), the commission may make an assessment or commence a proceeding to collect a tax at any time if a taxpayer:
(a) files a false or fraudulent return with intent to evade; or
(b) does not file a return.
(3) Notwithstanding Subsection (1), beginning on July 1, 1998, the commission may extend the period to make an assessment or to commence a proceeding to collect the tax under this chapter if:
(a) the three-year period under Subsection (1) has not expired; and
(b) the commission and the taxpayer sign a written agreement:
(i) authorizing the extension; and
(ii) providing for the length of the extension.
(4) If the commission delays an audit at the request of a taxpayer, the commission may make an assessment as provided in Subsection (5) if:
(a) the taxpayer subsequently refuses to agree to an extension request by the commission; and
(b) the three-year period under Subsection (1) expires before the commission completes the audit.
(5) An assessment under Subsection (4) shall be:
(a) for the time period for which the commission could not make an assessment because of the expiration of the three-year period; and
(b) in an amount equal to the difference between:
(i) the commission's estimate of the amount of taxes the taxpayer would have been assessed for the time period described in Subsection (5)(a); and
(ii) the amount of taxes the taxpayer actually paid for the time period described in Subsection (5)(a).
(6) (a) Except as provided in Subsection (6)(b), the commission may not make a credit or refund unless the taxpayer files a claim with the commission within three years of the date of overpayment.
(b) Notwithstanding Subsection (6)(a), beginning on July 1, 1998, the commission shall extend the period for a taxpayer to file a claim under Subsection (6)(a) if:
(i) the three-year period under Subsection (6)(a) has not expired; and
(ii) the commission and the taxpayer sign a written agreement:
(A) authorizing the extension; and
(B) providing for the length of the extension.
1998
