Repealing the Salary Credit Would Eliminate an Incentive for Insurance Companies to Create Jobs and Invest in Florida 

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For at least the last 60 years, Florida’s tax policy has provided a clear preference to insurance companies that had a presence in Florida. Since 1988, that preference has been in the form of a credit against a company’s insurance premium taxes of 15 percent of the salaries paid to Florida-based employees. This preference helps to promote the insurance industry in Florida, a desirable, clean industry with relatively high-paying jobs.

The 2017 Legislature is considering SB 378, a bill that would eliminate the insurance premium tax (IPT) credit. This would result in a tax increase of more than $314.5 million.It must be remembered that, while it certainly provides an economic development incentive, the credit was not created as a new tax cut or benefit to Florida insurers, it was used to lessen a significant tax increase on them. The credit was part of an insurance tax overhaul that took two tries to find the right level of taxation, while maintaining a 40 year preference for Florida companies.

This report examines the issues involved with repealing the salary credit and concludes it should be maintained.

The Author

Kurt Wenner, Vice President of Research. Kurt has authored all of the major tax publications produced by Florida TaxWatch, including pieces on Florida’s Intangibles Tax, and general sales, property, and business tax issues.

See Kurt's full bio

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Media Inquiries:  Contact Leah Courtney by Email or Phone: 850.212.5052

Media Inquiries:
Contact Leah Courtney by Email
or Phone: 850.212.5052