Indiana Legislature Takes First Step in Overriding Premium Tax Veto

The Indiana House voted Tuesday to override Gov. Frank O’Bannon’s veto of legislation that would lower the state’s premium tax rate. The National Association of Independent Insurers supports this effort and urges the Senate to join the House by voting to override the veto.

Ironically, the Governor also supports the override of his veto. The premium tax reduction bill was originally part of the Governor’s Legislative package and passed both houses of the legislature without opposition. However, it was vetoed due to a projected budget shortfall last spring.

As the fiscal picture improved, O’Bannon led the call for an override. The premium tax reduction bill cuts the rate from 2 percent to 1.3 percent over five years. Industry projections indicate the measure will have a positive impact on economic development and will not negatively affect the state’s budget.