Revision: Jan. 16, 2019, 8:46 a.m.
HB 620-FN - AS INTRODUCED
2019 SESSION
19-0682
01/05
HOUSE BILL 620-FN
AN ACT relative to the penalty fee structure for late premium tax payments.
SPONSORS: Rep. Hunt, Ches. 11
COMMITTEE: Commerce and Consumer Affairs
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ANALYSIS
This bill establishes a graduated fee schedule for payment of the insurance premium tax.
This bill is a request of the insurance department.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
19-0682
01/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nineteen
AN ACT relative to the penalty fee structure for late premium tax payments.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Premium Tax; Collection, Minimum, Penalty, and Prepayments. Amend RSA 400-A:32, IV to read as follows:
IV. Any insurer failing to file the report required by RSA 400-A:31 or failing to remit the proper tax within the time for filing shall pay a penalty [equal to 10] contingent upon the number of days that have passed since the due date. For late payments received 1-30 days after the due date, the penalty fee shall be 3 percent [on] of the amount of the tax due. For late payments received 31-60 days after the due date, the penalty fee shall be 6 percent of the amount of tax due. For late payments received more than 60 days after the due date, the penalty fee shall be 12 percent of the amount of tax due. If the tax or the estimated tax is not paid when due, the commissioner may suspend or revoke the insurer's certificate of authority.
2 Insurance Department; Administrative Fund. Amend RSA 400-A:39, XI to read as follows:
XI. Any insurer that does not pay amounts due under this section within 45 days of the billing date shall incur a late payment penalty [equal to 10 percent of the amount assessed. In addition, the sum total of the assessment and penalty shall accrue with interest, from the 45th day until the date of payment, at a rate of 0.050 percent per day compounded daily] contingent upon the number of days that have passed since the due date. For late payments received 1-30 days after the due date, the penalty fee shall be 3 percent of the amount of tax due. For late payments received 31-60 days after the due date, the penalty fee shall be 6 percent of the amount of tax due. For late payments received more than 60 days after the due date, the penalty fee shall be 12 percent of the amount of tax due.
3 Foreign Insurance Companies; Annual Statements; Tax. Amend RSA 405:29, II to read as follows:
II. Any producer failing to file the report or failing to remit the proper tax within the time period for filing shall pay a penalty [equal to 10] contingent upon the number of days that have passed since the due date. For late payments received 1-30 days after the due date, the penalty fee shall be 3 percent of the amount of tax due. For late payments received 31-60 days after the due date, the penalty fee shall be 6 percent of the amount of tax due. For late payments received more than 60 days after the due date, the penalty fee shall be 12 percent of the amount of tax due.
4 Risk Retention Act; Risk Retention Groups Not Chartered in This State. Amend RSA 405-A:3, III(a) to read as follows:
(a) Each risk retention group shall be liable for the payment of premium taxes and taxes on premiums of direct business for risks resident or located within this state, and shall report to the commissioner the net premiums written for risks resident or located within this state. Such risk retention group shall be subject to taxation, and any applicable fines and penalties related thereto, on the same basis as a foreign admitted insurer. A risk retention group failing to remit the proper tax within the time period for filing shall pay a penalty contingent upon the number of days that have passed since the due date. For late payments received 1-30 days after the due date, the penalty fee shall be 3 percent of the amount of tax due. For late payments received 31-60 days after the due date, the penalty fee shall be 6 percent of the amount of tax due. For late payments received more than 60 days after the due date, the penalty fee shall be 12 percent of the amount of tax due.
5 Unauthorized Insurance Premium Tax. Amend RSA 406-B:11, I to read as follows:
I. Except as to premiums on lawfully procured surplus lines insurance pursuant to the surplus lines laws of this state, and premiums on unlicensed insurance procured by industrial insurers on which a tax has been paid pursuant to RSA 406-B:16, VI and premiums on independently procured insurance on which a tax has been paid pursuant to RSA 406-B:17, every unauthorized insurer shall pay to the commissioner before March 1 next succeeding the calendar year in which the insurance was so effectuated, continued or renewed a premium receipts tax of 4 percent of gross premiums charged for such insurance other than marine insurance and a premium receipts tax of 2 percent of gross premiums charged for such marine insurance on subjects resident, located or to be performed in this state. Such insurance on subjects resident, located or to be performed in this state procured through negotiations or an application, in whole or in part occurring or made within or from within or outside of this state, or for which premiums in whole or in part are remitted directly or indirectly from within or outside of this state, shall be deemed to be insurance procured, or continued or renewed in this state. The term "premium" includes all premiums, membership fees, assessments, dues, and any other consideration for insurance. Such tax shall be in lieu of all taxes and fire department dues. On default of any such unauthorized insurer in the payment of such tax the insured shall pay the tax. If the tax prescribed by this section is not paid within the time stated, the tax shall be increased by a penalty [of 25 percent and by the amount of an additional penalty computed at the rate of one percent per month or any part thereof from the date such payment was due to the date paid.] contingent upon the number of days that have passed since the due date. For late payments received 1-30 days after the due date, the penalty fee shall be 3 percent of the amount of tax due. For late payments received 31-60 days after the due date, the penalty fee shall be 6 percent of the amount of tax due. For late payments received more than 60 days after the due date, the penalty fee shall be 12 percent of the amount of tax due.
6 Unauthorized Insurance Premium Tax. Amend RSA 406-B:16, VI(b) to read as follows:
(b) Any insured failing to file the report or failing to remit the proper tax within the time period for filing shall pay a penalty [equal to 10] contingent upon the number of days that have passed since the due date. For late payments received 1-30 days after the due date, the penalty fee shall be 3 percent of the amount of tax due. For late payments received 31-60 days after the due date, the penalty fee shall be 6 percent of the amount of tax due. For late payments received more than 60 days after the due date, the penalty fee shall be 12 percent of the amount of tax due.
7 Independently Procured Insurance. Amend RSA 406-B:17, V to read as follows:
V. If the insured fails to withhold from the premiums the amount of tax herein levied, the insured shall be liable for the amount thereof and shall pay the same to the commissioner within the time stated in paragraph III. If the tax prescribed by this section is not paid within the time stated in paragraph III, the tax shall be increased by a penalty [of 25 percent and by the amount of an additional penalty computed at the rate of one percent per month or any part thereof from the date such payment was due to the date paid] contingent upon the number of days that have passed since the due date. For late payments received 1-30 days after the due date, the penalty fee shall be 3 percent of the amount of tax due. For late payments received 31-60 days after the due date, the penalty fee shall be 6 percent of the amount of tax due. For late payments received greater than 60 days after the due date, the penalty fee shall be 12 percent of the amount of tax due.
8 Effective Date. This act shall take effect January 1, 2020.
19-0682
1/7/19
HB 620-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to the penalty fee structure for late premium tax payments.
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
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| Estimated Increase / (Decrease) | |||
STATE: | FY 2020 | FY 2021 | FY 2022 | FY 2023 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | ($139,560) | ($139,560) | ($139,560) | ($139,560) |
Expenditures | $0 | $0 | $0 | $0 |
Funding Source: | [ X ] General [ ] Education [ ] Highway [ X ] Other - | |||
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METHODOLOGY:
This bill establishes a graduated penalty schedule for late payments on taxes and payments to the administration fund collected by the Insurance Department. The Department computed an annual average of penalties collected over the past five years under current law. The Department then calculated what the penalties would have been under the proposed graduated penalties of 3% for 1-30 days past due, 6% for 31-60 days, and 12% for balances past due for more than 60 days. Based on a comparison of current law and the proposed law, the Department determined the average annual penalty revenue would decrease by $139,560.
AGENCIES CONTACTED:
Insurance Department