Maine 2023-2024 Regular Session

Maine Senate Bill LD1720

Introduced
4/18/23  
Refer
4/18/23  
Engrossed
6/14/23  

Caption

An Act to Phase Out the Insurance Premium Tax on Annuities

Impact

The introduction of LD1720 is expected to have significant implications for state laws regarding taxation. By phasing out the insurance premium tax, the bill aims to enhance the attractiveness of annuities as a financial product for consumers. This change could lead to increased investments in annuities, helping individuals secure their financial future while also increasing the competitive landscape for insurers. Additionally, during the phase-out period, the bill stipulates that the retaliatory tax on non-Maine insurance companies will not apply, further incentivizing these companies to offer their products in the state.

Summary

LD1720 is a legislative document aimed at phasing out the insurance premium tax applied to annuities over a period of ten years, commencing in 2024. The bill specifies a gradual reduction in the tax rate from 1.8% in 2024 to 0.2% by 2032, ultimately eliminating the tax altogether on annuity considerations starting in 2033. This measure is designed to encourage the purchase of annuities by alleviating the financial burden of taxation on these products, thus promoting savings and investment among residents of the state.

Sentiment

The sentiment surrounding LD1720 appears to be generally supportive among proponents who believe that the elimination of the insurance premium tax on annuities will foster a more favorable environment for financial planning and saving. Advocates argue that this step is crucial for promoting personal financial security for residents. However, there are also concerns regarding the potential long-term impact on state revenues, as a reduction in tax income might affect funding for public services. Critics may highlight the risk of diminishing returns for the state against the benefits to individuals.

Contention

Notable points of contention in discussions around LD1720 include the potential revenue loss for the state government resulting from the gradual elimination of this tax. Legislators may weigh the benefits to consumers against the economic implications for state funding and services. Proponents of the bill advocate for the broader economic benefits that could arise from increased investment in annuities, whereas opponents may caution that such tax cuts could impair the state's ability to fund essential services in the future.

Companion Bills

No companion bills found.

Previously Filed As

ME SB32

Reducing insurance company premium tax rates and discontinuing remittance and crediting of a portion of the premium tax to the insurance department service regulation fund.

ME A1339

Increases from two percent to three percent the tax on fire insurance premiums written by out-of-State insurers.

ME S0857

Contingent Deferred Annuities

ME HF2071

Insurance premium tax; tax on health insurers modified.

ME H5094

Contingent Deferred Annuities

ME HB868

Insurance premium tax; exempt insurance carriers furnishing services to governmental entities.

ME SB166

Insurance; contingent deferred annuities, nonforfeiture benefits.

ME S2948

Establishes requirements regarding processing of requests to surrender or annuitize matured annuities.

ME HB2745

Increasing temporarily insurance premium taxes on insurers to fund health insurance premium assistance.

ME SB1135

Health insurance; premium taxes; clarifying applicability of certain exclusion; premium tax credit; creating certain exclusion. Emergency.

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