Florida insurers are showing some signs of relief after they convinced House lawmakers to stop a Senate bill that would have eliminated a 15 percent insurance premium tax credit. The Senate bill would have used the funds to reduce automobile license fees.
Coming into the final days of Florida’s legislative session, insurers found themselves unexpectedly trying to ward off a late Senate proposal to repeal the 27-year-old tax credit that allows them to reduce their taxes by up to 15 percent of the salaries they pay employees in the state. Agents are not considered employees.
Senate lawmakers wanted to use the tax money to reduce a large hike in automobile fees that was enacted in 2009. According to a cost study, the removal of the tax credit would have increased state revenues by roughly $220 million annually, which would have all but covered the $225 million price tag to reduce auto fees.
The tax credit is worth $25 million to State Farm Insurance Co. and $32 million to Blue Cross and Blue Shield of Florida. And other insurers say the credit has helped them build large service centers in the Jacksonville, Tampa, and Orlando areas.
The House Committee on Appropriations, however, by a unanimous vote approved an amendment killing the Senate proposal.
Under the revised House bill, drivers’ fees will still drop, but instead of the full decrease going into effect this year, it would be spread over the next five. Eventually, drivers will see an overall savings of $12 per driver.
Florida Insurance Council Vice President Sam Miller said stopping the repeal of the credit is the number one priority of the association this year.
“This is a job killer” said Miller, of the proposed repeal. “Other states are aggressively pursuing these companies and these are good paying jobs that help support communities.”
While the industry has prevailed so far, the fight over the tax credit may not be over. The Senate could still attach it to an omnibus insurance bill that is making its way to the process.
“Hopefully, the House will stand firm,” said Miller.
The state’s legislature will adjourn on Friday.
May 1st, 2013