AN ACT
RELATING TO TAXATION; DELETING
EXEMPTIONS FROM THE PREMIUM TAX; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF
THE STATE OF NEW MEXICO:
Section 1. Section 59A-6-2 NMSA 1978 (being Laws 1984,
Chapter 127, Section 102, as amended) is amended to read:
"59A-6-2. PREMIUM TAX.--
A. The premium tax provided for in this section
shall apply as to the following taxpayers:
(1) each insurer authorized to transact insurance
in New Mexico;
(2) each insurer formerly authorized to transact
insurance in New Mexico and receiving premiums on policies remaining in force
in New Mexico, except that this provision shall not apply as to an insurer that
withdrew from New Mexico prior to March 26, 1955;
(3) each plan operating under provisions of
Chapter 59A, Articles 46 through 49 NMSA 1978;
(4) each property bondsman, as that person is
defined in Section 59A-51-2 NMSA 1978, as to any consideration received as
security or surety for a bail bond in connection with a judicial proceeding,
which consideration shall be considered "gross premiums" for the
purposes of this section; and
(5) each unauthorized insurer that has assumed a
contract or policy of insurance directly or indirectly from an authorized or
formerly authorized insurer and is receiving premiums on such policies
remaining in force in New Mexico, except that this provision shall not apply if
a ceding insurer continues to pay the tax provided in this section as to such
policy or contract.
B. Each such taxpayer shall pay in accordance
with this subsection three percent of the gross premiums and membership and
policy fees received by it on insurance or contracts covering risks within this
state during the preceding calendar year, less all return premiums, including
dividends paid or credited to policyholders or contract holders and premiums
received for reinsurance on New Mexico risks.
For each calendar quarter, an estimated payment shall be made on April
15, July 15, October 15 and the following January 15. The estimated payments shall be equal to at
least one-fourth of either the payment made during the previous calendar year
or eighty percent of the actual payment due for the current calendar year,
whichever is greater. The final
adjustment for payments due for the prior year shall be made with the return
which shall be filed on April 15 of each year, at which time all taxes for that
year are due. Dividends paid or credited
to policyholders or contract holders and refunds, savings, savings coupons and
similar returns or credits applied or credited to payment of premiums for
existing, new or additional insurance shall, in the amount so used, constitute
premiums subject to tax under this section for the year in which so applied or
credited, except that:
(1) as to every insurer which throughout such
preceding calendar year had at least forty percent of its admitted assets
invested in New Mexico investments, as the same are defined in Subsection C of
this section, the rate of such tax shall be nine-tenths percent in lieu of
three percent; and
(2) effective January 1, 1992, the rate shall be
one and four-tenths percent; effective July 1, 1992, the rate shall be one and
nine-tenths percent; effective January 1, 1993, the rate shall be two and
four-tenths percent; and effective July 1, 1993 and thereafter, the rate shall
be three percent.
C. New Mexico investments for the purpose of
Subsection B of this section are defined as follows:
(1) real estate located within New Mexico;
(2) bonds or obligations of New Mexico or of any
county or other subdivision thereof;
(3) bonds, debentures or secured obligations of
any corporation that has fifty percent of its assets located within New Mexico;
(4) first mortgages secured by real estate
located within New Mexico;
(5) deposits in state banks, national banks and
trust companies having their principal place of business within New Mexico;
(6) policy loans to residents of New Mexico; and
(7) preferred and common stock of corporations
having at least fifty percent of their assets located within New Mexico.
D. Nothing contained in Subsection C of this
section shall be construed to affect any provision of Chapter 59A, Article 9
NMSA 1978.
E. Exempted from the tax imposed by Subsection B
of this section are:
(1) premiums attributable to insurance or
contracts purchased by the state or a political subdivision for the state's or
political subdivision's active or retired employees; and
(2) payments received by a health maintenance
organization from the federal secretary of health and human services pursuant
to a contract issued under the provisions of 42 U.S.C. Section 1395
mm(g)."
Section 2. TEMPORARY PROVISION--TRANSITION.--A taxpayer
that makes an estimated payment for the first quarter of 2003 on April 15, 2003
pursuant to Section 59A-6-2 NMSA 1978 as it is amended in this act and, in
determining that payment, is required to include premiums that would have been
exempt pursuant to the law in effect prior to January 1, 2003 shall not be
subject to interest and penalty charges for late payment or underpayment of
that estimated payment or the underlying tax liability.
Section 3. APPLICABILITY.--The provisions of this act
apply to premiums received in the 2003 and subsequent calendar years.
Section 4. EMERGENCY.--It is necessary for the public
peace, health and safety that this act take effect immediately.
HB 130
Page 4