Tennessee House Bill HB0610

Tennessee 2023-2024 Regular Session

• Introduced: 1/26/23
• Refer: 2/1/23
• Refer: 2/21/23
• Refer: 2/28/23

Caption

AN ACT to amend Tennessee Code Annotated, Title 56, Chapter 4, Part 2, relative to a premium tax credit for examination charges, fees, and expenses.

Impact

If enacted, this bill will have notable implications for state laws governing insurance taxation. With the introduction of a carry-forward system, insurance companies can manage their tax liabilities more effectively, encouraging compliance and potentially lowering operational costs. This change could also promote a more favorable business environment in the insurance sector by allowing firms to smoothly navigate their tax obligations against incurred examination-related expenses.

Summary

House Bill 0610 proposes amendments to Tennessee Code Annotated, specifically targeting the premium tax credit associated with examination charges, fees, and expenses incurred by insurance companies. The bill allows these expenses paid to the department to be credited against the premium taxes collected, which is expected to ease the financial burden on insurance entities operating within the state. It specifies that while such credits can be utilized, they are restricted to charges incurred after January 1, 2023, and any excess amount beyond the tax liability for a given year can be carried forward for a maximum of five years for future credit.

Contention

While the bill presents potential benefits for the insurance industry, some could argue about the fairness of incentivizing credits for examination costs as not all companies may equally benefit depending on their size and operation scale. Discussions around the bill may involve debates on the long-term impact of such tax provisions on state revenue and whether it's appropriate to allow companies to defer tax liabilities, possibly leading to calls for adjustments or more equitable distribution of tax responsibilities across the industry.