Rep. Barbara Flynn Currie

Filed: 12/1/2014

 

 


 

 


 
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AMENDMENT TO SENATE BILL 3366

2    AMENDMENT NO. ______. Amend Senate Bill 3366 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Insurance Code is amended by
5changing Sections 409 and 444 as follows:
 
6    (215 ILCS 5/409)  (from Ch. 73, par. 1021)
7    Sec. 409. Annual privilege tax payable by companies.
8    (1) As of January 1, 1999 for all health maintenance
9organization premiums written; as of July 1, 1998 for all
10premiums written as accident and health business, voluntary
11health service plan business, dental service plan business, or
12limited health service organization business; and as of January
131, 1998 for all other types of insurance premiums written,
14every company doing any form of insurance business in this
15State, including, but not limited to, every risk retention
16group, and excluding all fraternal benefit societies, all farm

 

 

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1mutual companies, all religious charitable risk pooling
2trusts, and excluding all statutory residual market and special
3purpose entities in which companies are statutorily required to
4participate, whether incorporated or otherwise, shall pay, for
5the privilege of doing business in this State, to the Director
6for the State treasury a State tax equal to 0.5% of the net
7taxable premium written, together with any amounts due under
8Section 444 of this Code, except that the tax to be paid on any
9premium derived from any accident and health insurance or on
10any insurance business written by any company operating as a
11health maintenance organization, voluntary health service
12plan, dental service plan, or limited health service
13organization shall be equal to 0.4% of such net taxable premium
14written, together with any amounts due under Section 444. Upon
15the failure of any company to pay any such tax due, the
16Director may, by order, revoke or suspend the company's
17certificate of authority after giving 20 days written notice to
18the company, or commence proceedings for the suspension of
19business in this State under the procedures set forth by
20Section 401.1 of this Code. The gross taxable premium written
21shall be the gross amount of premiums received on direct
22business during the calendar year on contracts covering risks
23in this State, except premiums on annuities, premiums on which
24State premium taxes are prohibited by federal law, premiums
25paid by the State for health care coverage for Medicaid
26eligible insureds as described in Section 5-2 of the Illinois

 

 

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1Public Aid Code, premiums paid for health care services
2included as an element of tuition charges at any university or
3college owned and operated by the State of Illinois, premiums
4on group insurance contracts under the State Employees Group
5Insurance Act of 1971, and except premiums for deferred
6compensation plans for employees of the State, units of local
7government, or school districts. The net taxable premium shall
8be the gross taxable premium written reduced only by the
9following:
10        (a) the amount of premiums returned thereon which shall
11    be limited to premiums returned during the same preceding
12    calendar year and shall not include the return of cash
13    surrender values or death benefits on life policies
14    including annuities;
15        (b) dividends on such direct business that have been
16    paid in cash, applied in reduction of premiums or left to
17    accumulate to the credit of policyholders or annuitants. In
18    the case of life insurance, no deduction shall be made for
19    the payment of deferred dividends paid in cash to
20    policyholders on maturing policies; dividends left to
21    accumulate to the credit of policyholders or annuitants
22    shall be included as gross taxable premium written when
23    such dividend accumulations are applied to purchase
24    paid-up insurance or to shorten the endowment or premium
25    paying period.
26    (2) The annual privilege tax payment due from a company

 

 

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1under subsection (4) of this Section may be reduced by: (a) the
2excess amount, if any, by which the aggregate income taxes paid
3by the company, on a cash basis, for the preceding calendar
4year under Sections 601 and 803 subsections (a) through (d) of
5Section 201 of the Illinois Income Tax Act exceed 1.5% of the
6company's net taxable premium written for that prior calendar
7year, as determined under subsection (1) of this Section; and
8(b) the amount of any fire department taxes paid by the company
9during the preceding calendar year under Section 11-10-1 of the
10Illinois Municipal Code. Any deductible amount or offset
11allowed under items (a) and (b) of this subsection for any
12calendar year will not be allowed as a deduction or offset
13against the company's privilege tax liability for any other
14taxing period or calendar year.
15    (3) If a company survives or was formed by a merger,
16consolidation, reorganization, or reincorporation, the
17premiums received and amounts returned or paid by all companies
18party to the merger, consolidation, reorganization, or
19reincorporation shall, for purposes of determining the amount
20of the tax imposed by this Section, be regarded as received,
21returned, or paid by the surviving or new company.
22    (4)(a) All companies subject to the provisions of this
23Section shall make an annual return for the preceding calendar
24year on or before March 15 setting forth such information on
25such forms as the Director may reasonably require. Payments of
26quarterly installments of the taxpayer's total estimated tax

 

 

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1for the current calendar year shall be due on or before April
215, June 15, September 15, and December 15 of such year, except
3that all companies transacting insurance in this State whose
4annual tax for the immediately preceding calendar year was less
5than $5,000 shall make only an annual return. Failure of a
6company to make the annual payment, or to make the quarterly
7payments, if required, of at least 25% of either (i) the total
8tax paid during the previous calendar year or (ii) 80% of the
9actual tax for the current calendar year shall subject it to
10the penalty provisions set forth in Section 412 of this Code.
11    (b) Notwithstanding the foregoing provisions, no annual
12return shall be required or made on March 15, 1998, under this
13subsection. For the calendar year 1998:
14        (i) each health maintenance organization shall have no
15    estimated tax installments;
16        (ii) all companies subject to the tax as of July 1,
17    1998 as set forth in subsection (1) shall have estimated
18    tax installments due on September 15 and December 15 of
19    1998 which installments shall each amount to no less than
20    one-half of 80% of the actual tax on its net taxable
21    premium written during the period July 1, 1998, through
22    December 31, 1998; and
23        (iii) all other companies shall have estimated tax
24    installments due on June 15, September 15, and December 15
25    of 1998 which installments shall each amount to no less
26    than one-third of 80% of the actual tax on its net taxable

 

 

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1    premium written during the calendar year 1998.
2    In the year 1999 and thereafter all companies shall make
3annual and quarterly installments of their estimated tax as
4provided by paragraph (a) of this subsection.
5    (5) In addition to the authority specifically granted under
6Article XXV of this Code, the Director shall have such
7authority to adopt rules and establish forms as may be
8reasonably necessary for purposes of determining the
9allocation of Illinois corporate income taxes paid under
10subsections (a) through (d) of Section 201 of the Illinois
11Income Tax Act amongst members of a business group that files
12an Illinois corporate income tax return on a unitary basis, for
13purposes of regulating the amendment of tax returns, for
14purposes of defining terms, and for purposes of enforcing the
15provisions of Article XXV of this Code. The Director shall also
16have authority to defer, waive, or abate the tax imposed by
17this Section if in his opinion the company's solvency and
18ability to meet its insured obligations would be immediately
19threatened by payment of the tax due.
20    (6) This Section is subject to the provisions of Section 10
21of the New Markets Development Program Act.
22(Source: P.A. 97-813, eff. 7-13-12.)
 
23    (215 ILCS 5/444)  (from Ch. 73, par. 1056)
24    Sec. 444. Retaliation.
25    (1) Whenever the existing or future laws of any other state

 

 

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1or country shall require of companies incorporated or organized
2under the laws of this State as a condition precedent to their
3doing business in such other state or country, compliance with
4laws, rules, regulations, and prohibitions more onerous or
5burdensome than the rules and regulations imposed by this State
6on foreign or alien companies, or shall require any deposit of
7securities or other obligations in such state or country, for
8the protection of policyholders or otherwise or require of such
9companies or agents thereof or brokers the payment of
10penalties, fees, charges, or taxes greater than the penalties,
11fees, charges, or taxes required in the aggregate for like
12purposes by this Code or any other law of this State, of
13foreign or alien companies, agents thereof or brokers, then
14such laws, rules, regulations, and prohibitions of said other
15state or country shall apply to companies incorporated or
16organized under the laws of such state or country doing
17business in this State, and all such companies, agents thereof,
18or brokers doing business in this State, shall be required to
19make deposits, pay penalties, fees, charges, and taxes, in
20amounts equal to those required in the aggregate for like
21purposes of Illinois companies doing business in such state or
22country, agents thereof or brokers. Whenever any other state or
23country shall refuse to permit any insurance company
24incorporated or organized under the laws of this State to
25transact business according to its usual plan in such other
26state or country, the director may, if satisfied that such

 

 

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1company of this State is solvent, properly managed, and can
2operate legally under the laws of such other state or country,
3forthwith suspend or cancel the license of every insurance
4company doing business in this State which is incorporated or
5organized under the laws of such other state or country to the
6extent that it insures in this State against any of the risks
7or hazards which are sought to be insured against by the
8company of this State in such other state or country.
9    (2) The provisions of this Section shall not apply to
10residual market or special purpose assessments or guaranty fund
11or guaranty association assessments, both under the laws of
12this State and under the laws of any other state or country,
13and any tax offset or credit for any such assessment shall, for
14purposes of this Section, be treated as a tax paid both under
15the laws of this State and under the laws of any other state or
16country.
17    (3) The terms "penalties", "fees", "charges", and "taxes"
18in subsection (1) of this Section shall include: the penalties,
19fees, charges, and taxes collected on a cash basis under State
20law and referenced within Article XXV exclusive of any items
21referenced by subsection (2) of this Section, but including any
22tax offset allowed under Section 531.13 of this Code; the
23aggregate Illinois corporate income taxes paid on a cash basis
24during the calendar year for which the retaliatory tax
25calculation is being made imposed under Sections 601 and 803
26subsections (a) through (d) of Section 201 of the Illinois

 

 

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1Income Tax Act, less the recapture of any Illinois corporate
2income tax cash refunds to the extent that the amount of tax
3refunded was reported as part of the Illinois basis in the
4calculation of the retaliatory tax for a prior tax year,
5provided that such recaptured refund shall not exceed the
6amount necessary for equivalence of the Illinois basis with the
7state of incorporation basis in such tax year, and after any
8tax offset allowed under Section 531.13 of this Code; income or
9personal property taxes imposed by other states or countries;
10penalties, fees, charges, and taxes of other states or
11countries imposed for purposes like those of the penalties,
12fees, charges, and taxes specified in Article XXV of this Code
13exclusive of any item referenced in subsection (2) of this
14Section; and any penalties, fees, charges, and taxes required
15as a franchise, privilege, or licensing tax for conducting the
16business of insurance whether calculated as a percentage of
17income, gross receipts, premium, or otherwise.
18    (4) Nothing contained in this Section or Section 409 or
19Section 444.1 is intended to authorize or expand any power of
20local governmental units or municipalities to impose taxes,
21fees, or charges.
22    (5) This Section is subject to the provisions of Section 10
23of the New Markets Development Program Act.
24(Source: P.A. 95-1024, eff. 12-31-08.)
 
25    Section 99. Effective date. This Act takes effect upon

 

 

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1becoming law.".