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Washington is seeking $ 29 million in retroactive internal tax



A bill introduced in Washington last week proposing a 2% internal tax on state-based risks would raise about $ 29 million in taxes and generate more than $ 2 million in annual revenue in the future, according to an official who testified before a Legislative Committee on Tuesday.

The bill, which is supported by several large state prisoner owners, follows four years of increased scrutiny of prisoners in Washington by State Insurance Commissioner Mike Kreidler.

After being challenged over the alleged non-payment of premium taxes, various major owners, including Microsoft Inc. 2018 and Costco Wholesale Corp., in 2019 paid back taxes and penalties to settle with the insurance department.

According to the text of SB 531

5, the legislation would not make Washington a residence in captivity but would create "a framework for the registration of captive insurers who insure Washington-based entities."

The legislation would only impose a premium tax on inmates "for insurance policies directly procured by and provided to their parent or another Washington subsidiary," the bill states. In addition, inmates would have to pay an annual registration fee of $ 2,500. [19659002] Witnesses before the Senate Commerce, Finance and Trade Committee on Tuesday Candice Myrum, Deputy Commissioner, Policy and Legislative Department of the Insurance Commissioner's Office, said that the premium tax would be applied retroactively for 10 years until January 1, 2021, in addition to future prisoner premiums.

Regulators estimate that the tax would increase $ 29 million on a retroactive basis and $ 2 million to $ 2.6 million annually, based on current internal use in the state.

Future tax revenues may rise to $ 5 million a year if, as expected, prisoners who had interrupted the business after the state began investigating the issue of re-entering the market, says Denny Eliason, a partner at lobbying firm Alliances Northwest, which represents Amazon.com Inc., Starbucks Corp. and other owners in captivity.

Prison owners have been working with the Insurance Commissioner since the legality of prisoners in Washington was questioned and the bill "offers a thoughtful compromise" and states "an appropriate level of registration and supervision", he said.

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