Relating to exempting premiums for certain insurance covering stored or in-transit baled cotton from surplus lines insurance premium taxes.
Impact
The impact of HB 2972 on state laws is significant as it modifies the tax obligations associated with surplus lines insurance. By exempting specific premiums from taxation, the bill seeks to stimulate economic activity within the cotton sector, potentially enhancing competitiveness in international markets. This could lead to increased production and exportation of Texas cotton, fostering a more robust agricultural economy.
Summary
House Bill 2972 seeks to amend the Insurance Code by exempting premiums for certain insurance covering stored or in-transit baled cotton from surplus lines insurance premium taxes. Specifically, it targets those insurance premiums that fall under ocean marine insurance coverage intended for export. By implementing this exemption, the bill aims to provide financial relief to stakeholders involved in the cotton industry, particularly those handling large volumes of baled cotton that is either stored or in transit for export purposes.
Contention
Notably, the bill's provisions aim to address previous tax liabilities, affirming that any tax obligations incurred before the effective date of the bill will remain in effect. This ensures that the amendment does not retroactively affect tax enforcement but instead focuses on future transactions. The consideration of such exemptions can also prompt discussions about the broader implications of tax relief measures for specific industries, highlighting potential inequities in tax policy.