Overview At the Property Casualty Insurers Association of America's (PCI) request, the Florida Department of Revenue (DOR) held a workshop on changes to Rule 12-24.003 that, under the guise of electronic submission, would require insurers to file their annual premium tax returns by hand-entering the information into a DOR website. PCI objected to this requirement. Rule 12-24.003 As reported in a Proposed Regulatory Bulletin on Sept. 30, 2010, the DOR issued a Notice of Rule Development on changes to Rule 12-24.003. Since insurers are already required to pay premium tax in excess of $20,000 electronically, from a practical standpoint, the rule simply adds the requirement that the tax return also be filed electronically.

PCI contacted the DOR to obtain further information on how an insurer would complete the electronic submission. The DOR reported that the process requires an insurer to:

1. Log in to this web page: https://ritx-fl-ipt.bswa.net/(S(svhs0yjchrs3gw450zk5xk45))/Login.aspx and then,
2. Hand-enter the information from the completed return, which is otherwise currently printed and mailed.

As a result, then, there is no electronic submission at all. It is only an "electronic return" on the DOR's end. Furthermore, the DOR stated that it was working on a powerpoint guide to completing the web entry process, but did not know when it would be ready. Oct. 11 Rule Development Workshop Under the terms of the Notice, PCI requested a workshop, which took place on Oct. 11. PCI was the only industry trade association represented, and one of only two industry representatives total. PCI commented that having insurers hand-enter information defeated the purpose of electronic submission, and that such a system did not recognize the substantial man-hours necessary to complete the return. Furthermore, that system created a huge potential for keystroke errors and the resulting liability for penalties, etc. Complicating both deficiencies was the fact that the printed return includes value fields for allocating premiums to 194 firefighter and 175 police pension Trust Fund localities. PCI recommended that the DOR not require submission of a premium tax return "by electronic means" until such time as an insurer could electronically upload the return to the DOR, as opposed to hand-entering the information. Without making specific recommendation, PCI further suggested that the DOR investigate the possibility of using third-party software vendors, but not the NAIC OPTins system. The DOR stated that its goal was a system that worked for the taxpayer in the most efficient manner possible. In informal discussions after the workshop, the DOR and PCI agreed that a good next step would be a workshop at which the technical professionals from both sides could to come together and discuss what works best. Such a discussion should also focus on maintaining uniformity with other states where the system works well. The DOR will accept written comments on this issue until Oct. 22. Comments may be directed to Janet L. Young, Tax Law Specialist, Technical Assistance and Dispute Resolution, Department of Revenue, P.O. Box 7443, Tallahassee, FL, 32314-7443. Comments may also be e-mailed to Young at [email protected]. Additional Information Bill and regulation text is available on the PCI member Web site, www.pciaa.net. Select Advocacy, State and use the Legislation Search or Regulation Search link. The bills and regulations are also tracked in the PCI Legislative Activity Reports, New Law Alert and Regulation Activity Report. Sign up for daily, weekly or monthly email delivery of the reports under My Profile, Publication Subscriptions, State Publications.

William H. Stander is PCI's assistant-vice president and regional manager in Florida. He may be contacted at 850-681-2615; [email protected].