Official: Nevada would have highest insurance premium tax if margin tax passes
A spokesman for the Insurance Division told the Economic Forum on Friday if the margin tax ballot question passes, Nevada would have the nation’s highest insurance premium tax.
Adam Plain told the panel preparing to project state revenues for the coming two years Nevada already imposes a 3.5 percent gross premium tax on all insurance policies sold in the state from auto and home insurance to commercial and specialty policies.
He said Ballot Question 3, the gross revenue tax proposed by the teachers’ union, would add 2 percent to that tax, raising Nevada’s total premium tax to 5.5 percent.
He said under Question 3, only gaming and mining are exempted from the margins tax. He said insurance premium taxes weren’t exempted so the 2 percent would be added on top of the 3.5 percent premiums already taxed.
That amount is passed on directly to the people and businesses buying insurance.
He said it could potentially either cause companies to stop selling insurance policies in Nevada, reducing competition, or cause the increase to be passed on directly to the consumer.
Nevada’s insurance premium tax is already among the highest in the nation. Only Hawaii is higher at 4.25 percent.
The Insurance Premium Tax generates more than $240 million a year to the state General Fund.