HB1665
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.
Last Action (May 5, 2025): Died in House Committee at Sine Die adjournment.
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AI-Generated Summary
House Bill 1665 amends Arkansas law concerning the insurance premium tax by eliminating the ability of insurers to apply certain payroll-based credits against tax liabilities related to individual or group comprehensive medical or hospital coverage. Specifically, the bill adds language to Arkansas Code § 26-57-604 to ensure that tax credits based on employee salaries and wages cannot be used as an offset against premium taxes collected from these specific health insurance categories. The bill also clarifies and updates existing statutory language regarding tax calculations and limitations on these credits. The primary effect of the legislation is to reduce the tax advantages previously available to accident and health insurers, potentially increasing state tax revenue. It serves to decouple the payroll-based credit from the premium tax obligations of comprehensive health coverage providers.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiary of this bill is the State of Arkansas, as the legislation is expected to increase state tax revenue by limiting the availability of premium tax credits for insurance companies. This revenue may subsequently be utilized for state budgetary needs, public services, or general government operations.
Who Might Suffer?
The entities most directly and negatively impacted are accident and health insurance companies, including health maintenance organizations (HMOs) operating in Arkansas, which have previously utilized these payroll-based credits to lower their overall insurance premium tax liability. These insurers may experience higher tax obligations, which could potentially influence their operational costs or premium pricing structures.
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