The Property Casualty Insurers Association of America (PCI) said Wednesday it is concerned with the New Jersey Assembly’s consideration of A-4401, legislation to impose a possible corporate business tax on insurers to help pay for the cost of tax rebates generally given to homeowners.
“The Assembly’s proposal is a classic example of robbing Peter to pay Paul,” said Richard Stokes, regional vice president for PCI. “While we recognize the process of paying for government, taxes must be fair, uniform and not burden consumers. This proposal disproportionately uses the insurance industry as a scapegoat to pay for homeowners tax rebates, and in the end, it is the New Jersey insurance consumers who will be paying the price.”
While final details are still unclear, PCI understands the Legislature is seeking to raise an additional $150 million from insurers, in addition to the premium taxes currently assessed, to help pay for the cost of homeowners tax rebates.
“In 2003, New Jersey insurers paid over $273 million in premium taxes, and this tax would represent an increase of over 40 percent,” added Stokes. “This would not only stifle jobs and economic development, but we believe this tax will force what is called a ‘retaliatory tax’ by other states at the expense of New Jersey consumers. The bottom line is that this proposal will result in higher premiums for the insurance-buying consumer.”
PCI hopes to get a copy of the bill shortly. At that time, PCI will reportedly review the final details in order to assess the full impact on insurance consumers.
While there may be various options that the Legislature might consider, PCI said it will continue to oppose any legislation that proposes to increase premium taxes.
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