Bill Caption

Relating to the applicability of the sales and use tax to certain insurance services.

Fiscal Notes

Estimated Two-year Net Impact to General Revenue Related Funds for SB1083, Committee Report 1st House, Substituted: a negative impact of ($3,000,000) through the biennium ending August 31, 2019.

Bill Analysis

SB 1083 would exclude from the definition of an "Insurance service" and taxability, a service performed by a certified public accountancy firm, or on the behalf of the firm by an owner, employee, or affiliate of the firm, if less than one percent of the firm's revenue in the calendar year is from services in this state that would otherwise constitute insurance service 

Vote Recommendation Notes

SB 1083 would clarify that CPA services are not an insurance service and taxable as such. Though this makes sense, we believe there could be a problem with such an exemption. We believe taxes should be applied equally on a consumption based method when it comes to sales and use tax. If a CPA firm does any insurance business, a tax should be imposed on those services. Same should apply for accounting services. Either all should be taxed equally based on service or the tax should be eliminated. Because of these conflicts, absent an amendment to address these issues, we remain neutral.