Establishes a flat rate of insurance premium tax and provides relative to certain insurance premium tax credits and exemptions (RR SEE FISC NOTE GF RV)
HB 594 restructures Louisiana’s insurance premium tax system, primarily for property and casualty insurers. The bill replaces the existing graduated premium tax structure with a flat 2.8% rate on gross annual written premiums, effective for taxable periods beginning on or after January 1, 2026. It also creates an automatic rate-reduction mechanism: beginning July 1, 2027, if the prior year’s combined premium tax and retaliatory tax collections exceed $273 million, the rate is reduced by 0.2 percentage points for the next taxable period, with a floor of 1.0%. The commissioner of insurance must publish notice of any reduced rate on the Department of Insurance website.
The bill also revises and preserves certain tax preferences tied to qualifying Louisiana investments. It restores and updates provisions allowing premium tax reductions, offsets, and related credits for insurers that hold specified levels of Louisiana investments, while phasing down some of those benefits over time. For property and casualty insurers, the investment-based reductions are scheduled to diminish from 2029 through 2031, and for certain periods in 2026 through 2028 the reduction cannot exceed the dollar amount reflected on the insurer’s 2024 Annual Premium Tax Statement. The bill further requires insurers, with limited exceptions for certain health maintenance organizations, to separately state premium taxes and certain fees on policy declaration pages.
HB 594 also repeals the Louisiana Capital Companies Tax Credit Program and removes certain existing premium tax credit and exemption provisions, including the retaliatory tax credit for certain domestic insurers and related repealed sections of the insurance and tax statutes. In addition, it amends several provisions governing premium tax offsets and qualifying Louisiana investments, including criteria for insurers, health maintenance organizations, and certain life insurers to qualify for those investment-based benefits. The act applies to taxable periods beginning on or after January 1, 2026, and becomes effective on that date.
The overall sentiment around the bill appears strongly favorable in the House, as reflected by its final passage vote of 92-0. The bill’s structure suggests support for simplifying the premium tax regime while preserving incentives for Louisiana investment and maintaining some protections for insurers during the transition. The absence of recorded opposition in the final vote indicates broad agreement on the measure as amended.
The main points of contention in the bill’s development appear to have centered on the size of the flat tax rate, the trigger for automatic reductions, and the scope and duration of investment-based tax benefits. The committee and floor amendments show multiple revisions to the flat rate, the revenue threshold for reductions, and the phase-out schedule for investment-related reductions, indicating negotiation over fiscal impact and industry incentives. Another notable issue was whether to retain or narrow tax credits and exemptions, including the repeal of the capital companies tax credit program and the treatment of retaliatory tax credits and premium tax offsets for insurers and related entities.
HB 594 substantially amends Louisiana’s insurance premium tax statutes, especially R.S. 22:831, 832, 833, 855, 2058, and 2092, by replacing the prior graduated tax structure with a flat premium tax rate and revising the rules for credits, offsets, and exemptions tied to qualifying Louisiana investments. It also repeals R.S. 22:601.16(4), portions of R.S. 22:832, and the Louisiana Capital Companies Tax Credit Program in Title 51. The bill affects property and casualty insurers most directly, but also touches health maintenance organizations, life insurers, domestic insurers seeking retaliatory tax credits, and insurers subject to premium tax reporting and declaration-page disclosure requirements.
The bill’s final passage by a 92-0 House vote indicates clear bipartisan or near-unanimous support at that stage. The amendments suggest the Legislature sought a compromise that balanced tax simplification and revenue predictability with continued incentives for Louisiana-based investment and limited transitional relief for insurers. Overall, the discussion reflected a favorable view of the bill’s policy direction, with adjustments made to address fiscal concerns and industry impacts.
The most notable disagreements appear to have involved how aggressive the premium tax reform should be and how quickly investment-based tax preferences should be reduced or eliminated. Amendments changed the flat rate multiple times and adjusted the revenue trigger for automatic reductions, showing concern about state revenue loss and the timing of tax relief. There was also tension over preserving incentives for insurers to invest in Louisiana versus phasing out those benefits, as well as over whether to retain credits such as the retaliatory tax credit and the capital companies tax credit program. These issues primarily involved lawmakers focused on fiscal stability and those emphasizing business incentives and insurance market competitiveness.