State Taxation Of Insurance

What Does State Taxation Of Insurance Mean?

Insurance companies in almost every single state are taxed by their state government. State governments tax insurance companies primarily through a tax called a "premium tax." This is a tax imposed on an insurance company based on the amount of premiums that it collects in a year.

Insuranceopedia Explains State Taxation Of Insurance

Oregon is the only state that does not tax insurance companies through a premium tax. Washington DC also doesn't participate in the practice. States also commonly tax insurance companies through a "retaliatory tax."

Taxes collected from insurance companies often makes up a significant portion of a state's taxation revenue, totally as much as hundreds of millions or even billions in a single tax period.