To Repeal The Credit Allowed Against The Insurance Premium Tax For Accident And Health Comprehensive Hospital And Medical Coverage Based On The Salary And Wages Of The Employees Of The Insurer.
Summary
HB1665 amends Arkansas law governing the insurance premium tax. The bill repeals the existing premium tax credit that certain life and accident-and-health insurers, including health maintenance organizations, may claim based on the noncommissioned salaries and wages of their Arkansas employees. Under current law, that credit can offset part of the premium tax, subject to percentage caps, annual limits, and exclusions for certain marketplace and Medicaid-related collections; HB1665 would remove that employee-wage-based credit from the statute.
The bill also makes conforming changes to the premium tax provisions and preserves the separate premium tax credit for the Arkansas historic rehabilitation income tax credit. It does not change the underlying premium tax rates themselves, but it would eliminate one tax preference available to insurers operating in Arkansas, thereby increasing premium tax liability for affected insurers to the extent they previously used the credit.
Impact
HB1665 would directly affect Arkansas Code § 26-57-604 by striking the premium tax credit tied to insurer payroll for Arkansas employees in the life and accident-and-health insurance market. The practical effect is to reduce or eliminate a tax offset currently available to eligible insurers and health maintenance organizations, while leaving the general premium tax structure and the historic rehabilitation-related credit intact. Insurers that previously claimed the wage-based credit would be the primary affected parties, and the state would likely collect additional premium tax revenue as a result.
Sentiment
No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or formal support/opposition in the available record. Based on the bill text and caption, the measure appears to be a revenue-raising or tax-base-broadening change rather than a benefit expansion, which often draws interest from fiscal policymakers and resistance from affected industry stakeholders. The absence of recorded discussion makes the overall sentiment difficult to assess beyond the bill’s clear policy direction.
Contention
The main point of contention is likely the repeal of the insurer payroll-based premium tax credit. Supporters would likely view the credit as an unnecessary tax expenditure that narrows the premium tax base, while insurers and health maintenance organizations would likely oppose losing a longstanding offset tied to Arkansas employment. A secondary issue is that the bill leaves in place other premium tax credits, which may prompt questions about why this particular credit is being singled out for repeal rather than the broader premium tax framework being revisited.