Which of the following statements is (are)true regarding taxation of insurance companies?
i.Insurance companies are exempt from having to pay state and federal income taxes.
ll.The primary purpose of the premium tax is to raise revenues for the state,not to provide funds for insurance regulation.

Question

Quizplus · Accepted Answer

Insurance companies are not completely exempt from state and federal income taxes. They are subject to certain taxes such as federal excise taxes and state premium taxes. The primary purpose of premium taxes is to generate revenue for the state, while funding for insurance regulation comes from other sources such as licensing fees and assessments on insurance companies.

Which of the Following Statements Is (Are)true Regarding Taxation of Insurance