Legislature Passes Short-Term Premium Tax Relief
As the 2024 legislative session neared its close, the Florida legislature passed temporary premium tax relief on policies covering residential homestead property as part of House Bill 7073 (HB 7073). The bill will result in savings to consumers as the Florida property insurance market continues to adjust to reforms passed in late 2022 and early 2023.
The bill contains a new section 624.5108 to be added to the Florida Insurance Code specifying that an insurer must deduct from the total amount charged for residential coverage of a dwelling an amount equal to 1.75 percent of the premium as defined in section 627.403, Florida Statutes, and the amount of the State Fire Marshal regulatory assessment under section 624.515. In other words, the new law provides policyholders with residential dwelling coverage a premium reduction equal to the premium tax percentage plus the fire marshal surcharge. The new law also provides for a premium reduction equal to the premium tax for specified personal or commercial lines flood policies.
The statute applies to policies with effective dates between October 1, 2024, and September 30, 2025. Insurers are required to identify the amount of the deduction on the declarations page.
For premium tax reporting purposes, insurers will continue to report the full policy premium prior to application of the new reduction. Insurers then will be able to take deductions for the full amount of the premium reductions against their premium taxes otherwise payable for 2024 and 2025. If an insurer’s tax liability is insufficient to fully use the credit, the Department of Revenue will refund the difference out of the state’s General Revenue Fund.
Insurers providing premium reductions under the new law will be required to identify with their quarterly and annual statement filings information about the number of policies receiving premium reductions and the dollar amount of reductions.