DRS: SN 94(13), 1994 Legislative Amendments Affecting the Insurance Premium Tax



450 Columbus Blvd
Hartford CT 06103

This Special Notice has been modified and superseded by SN 95(2)

SN 94(13)

1994 Legislative Amendments Affecting the Insurance Premium Tax

PURPOSE: This Special Notice describes amendments affecting the insurance premium tax made during the 1994 Regular and May Special Sessions of the Connecticut General Assembly.

EFFECTIVE DATE: The changes to the Insurance Premium Tax Act are effective as noted herein.

STATUTORY AUTHORITY: 1994 Conn. Pub. Acts 4 (May Spec. Sess.) 4, 5, 6, 47 and 49; and 1994 Conn. Pub. Acts 214.

TAX RATE DECREASES: Under Conn. Gen. Stat. 12-202 and 12-210, as amended by 1994 Conn. Pub. Acts 4 (May Spec. Sess.) 5 and 6, the insurance premium tax rate is reduced from 2% to 1.75% on all net direct insurance premiums received on and after January 1, 1995 for domestic insurers, and for premiums written within Connecticut by nonresident and foreign insurers.

ASSET TEST LIMIT: Under Conn. Gen. Stat. 12-202, as amended by 1994 Conn. Pub. Acts 4 (May Spec. Sess.) 4, effective January 1, 1994 the limit on the asset test is raised from $200 million to $250 million for insurance holding companies that are allowed a credit of the Corporation business tax against the insurance premiums tax.

PROPERTY TAX ON DATA PROCESSING EQUIPMENT: Under 1994 Conn. Pub. Acts 4 (May Spec. Sess.) 47, a credit is allowed for 100% of the property tax paid on electronic data processing equipment effective for property appearing on the October 1,1994 grand list and each grand list thereafter. This credit shall first be used by the taxpayer against the corporation business tax, and then against the insurance premium tax. This credit shall be allowable only after all other credits allowable against the insurance premium tax for such year have been applied.

HEALTH MAINTENANCE ORGANIZATIONS: Each health care center, as defined in Conn. Gen. Stat. 38a-175, shall be subject to the insurance premium tax at the rate of 1.75%. The tax is applicable to total net direct subscriber charges received on or after January 1, 1995.

EFFECT OF THIS DOCUMENT: A Special Notice is a document that announces a new policy or practice in response to changes in state or federal laws or regulations or to judicial decisions. A Special Notice indicates the Department's informal interpretation of Connecticut tax law and may be referred to for general guidance by taxpayers or tax practitioners.


FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24-hours a day by choosing Option 3 on your touch tone telephone.

Electronic Delivery Options: You can also obtain tax forms and publications 24-hours a day from our Web home page at https://www.ct.gov/drs. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.

SN 94(13)
Insurance premium tax
Issued: 10/10/94