TITLE 33 INSURANCE

Section 8. Fees and Taxes, 33-8-1 through 33-8-13.

ARTICLE 2 UNFAIR CLAIMS SETTLEMENT PRACTICES

33-8-4. Amount and method of computing tax on insurance premiums generally; exclusion of annuity considerations.

All foreign, alien, and domestic insurance companies doing business in this state shall pay a tax of 2 1/4 percent upon the gross direct premiums received by them on and after July 1, 1955. The tax shall be levied upon persons, property, or risks in Georgia, from January 1 to December 31, both inclusive, of each year without regard to business ceded to or assumed from other companies. The tax shall be imposed upon gross premiums received from direct writings without any deductions allowed for premium abatements of any kind or character or for reinsurance or for cash surrender values paid, or for losses or expenses of any kind; provided, however, deductions shall be allowed for premiums returned on change of rate or canceled policies; provided, further, that deductions may be permitted for return premiums or assessments, including all policy dividends, refunds, or other similar returns paid or credited to policyholders and not reapplied as premium for additional or extended life insurance. The term "gross direct premiums" shall not include annuity considerations.
For purposes of this chapter, annuity considerations received by nonprofit corporations licensed to do business in this state issuing annuities to fund retirement benefits for teachers and staff personnel of private secondary schools and colleges and universities shall not be considered gross direct premium.
Insurers shall be exempt from otherwise applicable state premium taxes as provided for in subsection (a) of this Code section on premiums paid by Georgia residents for high deductible health plans as defined by Section 223 of the Internal Revenue Code.

(Code 1933, § 56-1303, enacted by Ga. L. 1960, p. 289, § 1; Code 1933, § 56-1312, enacted by Ga. L. 1973, p. 499, § 4; Ga. L. 1976, p. 1080, § 2; Ga. L. 1979, p. 850, § 2; Ga. L. 2008, p. 292, § 1/HB 977; Ga. L. 2009, p. 652, § 1/HB 410.)

Editor's notes.

- Ga. L. 1979, p. 850, § 2, amended this section so as to exempt annuity considerations from taxation, such amounts being more akin to deposits in savings accounts than insurance premiums. In order to minimize the adverse effects of such exemption on revenues received from the taxation of insurance premiums, subsection (2) of Ga. L. 1979, p. 850, § 2, provides for a gradual elimination over a three-year period of the tax on annuity considerations, such reductions to commence in the calendar year commencing on January 1, 1980.

Ga. L. 2008, p. 292, § 6(a)/HB 977, not codified by the General Assembly, provides in part that the 2008 amendment is applicable to all taxable years beginning on or after January 1, 2009.

Ga. L. 2009, p. 652, § 6(a)/HB 410, not codified by the General Assembly, provides, in part, that the amendment to this Code section "shall be applicable to all taxable years beginning on or after January 1, 2009".

Law reviews.

- For article surveying recent legislative and judicial developments regarding Georgia's insurance laws, see 31 Mercer L. Rev. 117 (1979). For article, "Why Captives, Lord, What Have They Ever Done?: The Georgia Captive Insurance Company Act," see 26 Ga. St. B.J. 119 (1990). For article, "Revenue and Taxation: Amend Titles 48, 2, 28, 33, 36, 46, and 50 of the Official Code of Georgia Annotated, Relating Respectively to Revenue and Taxation, Agriculture, the General Assembly, Insurance, Local Government, Public Utilities, and State Government," see 28 Ga. St. U.L. Rev. 217 (2011).

JUDICIAL DECISIONS

County taxing power preempted prior to 1984.

- O.C.G.A. § 33-8-8.2, effective January 1, 1984, does not affect the validity of a DeKalb county license tax imposed for the years 1974 through 1981, when preemption of the county's power to tax casualty insurance companies could be fairly implied from the sweeping language and broad scope of the 1960 general Act regulating the insurance industry on a state-wide basis, and particularly from the state-wide gross premium tax on casualty insurance companies contained in this section. Cotton States Mut. Ins. Co. v. DeKalb County, 251 Ga. 309, 304 S.E.2d 386 (1983).

OPINIONS OF THE ATTORNEY GENERAL

The legislative intent of this section is clear. Annuity considerations are to be excluded from the tax because they are more akin to savings deposits than insurance premiums, and the exclusion is to be phased in over a three-year period commencing January 1, 1980, to minimize the impact of lost revenues on the state budget. 1981 Op. Att'y Gen. No. 81-63.

A conflict arises in Ga. L. 1979, p. 850, § 2, the "to read" clause, which provides that the tax is to be reduced by .75 percent effective January 1, 1980, by 1.50 percent effective January 1, 1981, and by 2.25 percent effective January 1, 1982; if this schedule of reduction is followed literally, the taxation of annuity premiums would end on January 1, 1982, as opposed to January 1, 1983. However, this schedule of reductions is followed immediately by the words "so that for the calendar years beginning on and after January 1, 1983, there shall be no further taxation of annuity considerations under this Title", which words reaffirm the General Assembly's intent for a three-year phaseout ending January 1, 1983. 1981 Op. Att'y Gen. No. 81-63.

Sponsor of prepaid legal service plan is an "insurance company" which owes premium taxes on risks placed in Georgia whether or not it is authorized to do business as an insurance company in Georgia. 1982 Op. Att'y Gen. No. 82-46.

Tax rate for legal services insurance.

- Companies offering prepaid legal services insurance should pay taxes on those premiums at the statutory rate established for nonlife insurance companies. 1990 Op. Att'y Gen. No. 90-44.

Premiums for group insurance covering Georgia residents written outside Georgia are taxable.

- The Insurance Commissioner may legally collect taxes on insurance premiums received by an insurer covering Georgia residents on a group insurance contract written outside Georgia. 1969 Op. Att'y Gen. No. 69-396.

Premiums for Metropolitan Atlanta Rapid Transit Authority insurance.

- Insurance companies and surplus line brokers who provide insurance coverage for the Metropolitan Atlanta Rapid Transit Authority are not exempt from paying tax on the premiums collected for such coverage. 1975 Op. Att'y Gen. No. 75-54.

Premiums for out-of-state life insurance on nonresidents subsequently moving into state.

- Life insurers not admitted in Georgia whose only contact with this state is the receipt of premiums on policies written and delivered without this state to persons not then residents of this state but who have subsequently moved to this state are not liable for the premium taxes imposed by this section. 1979 Op. Att'y Gen. No. 79-72.

Any action to recover insurance taxes under this chapter must be brought within seven years from the date that the execution may be lawfully issued. 1969 Op. Att'y Gen. No. 69-396.

Insurance companies exempt from federal income tax as religious and charitable organizations are subject to state and local premium tax liability unless specifically exempted. 1995 Op. Att'y Gen. No. 95-19.

HMO receipts of Medicaid premium payments.

- The Insurance Commissioner has the authority to tax HMO receipts of Medicaid premium payments. 1998 Op. Att'y Gen. No. 98-17.

RESEARCH REFERENCES

ALR.

- "Dividends" on policies as affecting computation of tax insurance premiums, 141 A.L.R. 1411.

What organizations are within provisions of tax statutes relating to insurance companies, 146 A.L.R. 454.

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