Washington voters have voted in a ballot measure to repeal a 2 per cent premium tax on captive insurers in the state, which was passed under Senate Bill 5315.
The bill was originally passed by the Washington State Legislature in May of this year to impose a premium tax on Washington-domiciled captive insurers at a rate of 2 per cent of the insurance premiums provided to the parent company or affiliate.
Washington’s Office of the Insurance Commissioner proposed draft regulations for the implementation of the captive insurance law in August, including the establishment of definitions of a captive insurance company, affiliates and eligibility for licensing and registration purposes.
Titled ‘The legislature imposed, without a vote of the people, a tax on captive insurers in the amount of 2 per cent of premiums from owners/affiliates, costing US$53 million in its first 10 years, for government spending’, Advisory Vote 38 was automatically referred to the ballot as a law that creates or increases taxes or fees.
However, the advisory vote is non-binding, meaning that the outcome of the ballot question will not directly cause a new, changed or rejected law. Rather, it will advise the state legislature on the steps to take next.
