AGO 84-4.

Case Date:March 05, 1984
Colorado Attorney General Opinions 1984. AGO 84-4. March 5, 1984Department of Law Attorney General Opinion FORMAL OPINION of DUANE WOODARD Attorney General Opinion No. 84-4 AG Alpha No. RG IN AGAMM Daniel J. Colaiannia Acting Insurance Commissioner Colorado Division of Insurance First Western Plaza Bldg. 303 W. Colfax Ave., 5th Floor Denver, Colorado 80204 RE: The exemption from premium tax on premiums paid by certain public entities pursuant to C.R.S. 1973, 10-3-209(1)(d)(IV)Dear Commissioner Colaiannia: This opinion is in response to Commissioner Barnes' January 4, 1984 request for a formal attorney general's opinion regarding the exemption of premium tax on premiums paid by certain public entities. QUESTIONS PRESENTED AND CONCLUSIONS The request for an attorney general's opinion presents the following five questions: Are premiums paid by the employer, which employer is the state or appropriate governmental entity within the state, properly interpreted as not being subject to the premium tax? Premiums paid by public entities are exempt when certain conditions have been met. Where the governmental entity, as an employer, pays part of the premium and the employee pays the balance, is only the portion of the premium paid by the state exempt from premium tax? Yes. Are premiums on insurance under deferred compensation plans subject to premium tax under circumstances where the premium amount is not deemed taxable income to the employee? Yes. Do the conclusions reached with regard to the foregoing questions apply equally to domestic and foreign insurance companies licensed in Colorado? Except for the retaliatory tax and certain provisions covering insurance business done by fraternal and benevolent associations and certain domestic insurance companies which issued policies prior to 1959, the statute draws no distinction between foreign and domestic insurance companies. Does the retaliatory tax provision, C.R.S. 1973, 10-3-209(2), apply to foreign insurers otherwise eligible for the premium tax exemption? Yes. ANALYSIS C.R.S. 1973, 10-3-209 levies a tax, to be paid by all insurance companies doing business in this state, on all premiums collected or contracted for on insurance covering property or risks located in this state. C.R.S. 1973, 10-3-209(1)(d) sets out certain exemptions to this tax one of which concerns premiums paid by certain governmental entities. The pertinent language of that subsection reads as follows: (IV) Except to the extent provided in subsection (2) of this section, the tax imposed by this section ... shall not apply to premiums collected or contracted for after December 31, 1968, on policies...

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