Tax Section
The Taxation Section audits and determines premium taxes owed by insurance companies to the state. Annual tax returns are filed March 1 for the previous year’s business. After an audit, the Insurance certifies to the Department of Revenue the tax due from each company.
The Missouri premium tax rate is 2 percent, or the same rate levied by 34 states. For 2002, total premium taxes certified for collection was $165.9 million compared to the 2001 tax collection amount of $151.4 million. In addition, insurance companies paid workers compensation tax for 2002 of $8.2 million.
Insurers may reduce their taxes, dollar for dollar, by claiming credits, examination fees, income taxes, franchise taxes, health pool assessments, personal property taxes, insurance guaranty association assessments, numerous tax credits that range from domestic violence to history preservation to low income housing spending. The total credits allowed in 2002 were $70.5 million, up from $64.2 million for 2001.
Missouri law also allows deductions from direct premium totals for dividends, returned premiums, group health benefits paid and premiums on annuities. Deductions for group health benefits paid in 2002 totaled $1.1 billion. While deductions for annuities were $3.5 billion.
The rates for the workers compensation administrative tax and the Second Injury Fund surcharge are determined by the Division of Workers Compensation within the Missouri Department of Labor and Industrial Relations. In 2002 the workers compensation tax rate was set at 1 percent, which rose to 2 percent in 2003 before falling to 1 percent again for 2004. The Second Injury Fund surcharge increased from 2.5 percent for 2002 to 4 percent for 2003.
| Premium Tax | 2001 | 2002 |
|---|---|---|
| Life Insurance Companies | ||
| Missouri Premium Tax | $59,066,456 | $60,251,486 |
| Retaliatory Tax | 4,596,267 | 4,536,645 |
| Total | 63,662,723 | 64,788,131 |
| Property and Casualty Insurance Companies | ||
| Missouri Premium Tax | 76,384,576 | 92,258,146 |
| Retaliatory Tax | 10,428,553 | 8,221,054 |
| Total | 86,813,129 | 100,479,200 |
| Missouri Mutual Insurance Companies | ||
| Missouri Premium Tax | 374,062 | 273,026 |
| Risk Retention Group | ||
| Missouri Premium Tax | 528,739 | 351,119 |
| Retaliatory Tax | 40,482 | 5,957 |
| Total | 569,221 | 357,076 |
| Total Premium Tax | $151,419,135 | 165,897,433 |
| Workers Compensation Administrative Tax | ||
| Insurance Companies | $1,358,774 | 8,198,266 |
| Self-Insurers | 0 | 5,816,101 |
| Total | 1,358,774 | 14,014,367 |
| Total Premium Tax And Workers Compensation Tax | $152,777,909 | 179,911,800 |
| Second Injury Fund Surcharge | ||
| Self-Insurers | $15,707,274 | 14,540,261 |