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GUARANTY INCOME LIFE INSURANCE COMPANY
Press Release
April 19, 2004, Baton Rouge, LA. Guaranty Income Life Insurance Company ("GILICO") announces new calculator for immediate annuity quotes in states with premium taxes.
Annuities are an important vehicle for meeting retirement savings needs. The application of the state premium tax to funds deposited into an annuity contract during the accumulation phase of the contract can have a significant adverse impact on the accumulation of retirement savings. During the past 20 years, the ACLI and the Committee of Annuity Insurers, including GILICO, have worked with a number of states to obtain positive changes regarding the taxation of these retirement products. Many states repealed their application of the premium tax to annuities. Today, only seven states tax annuity considerations.
Three states (California, Kansas [annuity tax repealed in 1997] and Nevada) enacted specific language offering insurers an elective choice regarding the point in a deferred annuity contract when the annuity tax could be paid; i.e., when the funds are deposited or when the funds are applied to an annuitized stream of payments. One state (North Carolina [annuity tax repealed in 1995]) enacted a statute that specifically required that the annuity tax be paid when the annuity benefits commenced. But other states have statutes that do not specify at which point in the annuity contract the annuity tax must be paid. In those statutes, the only mandate is that the tax must be paid on annuity considerations.
ANNUITY PREMIUM TAXES
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State
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| California |
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| Maine |
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| Nevada |
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| South Dakota |
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| West Virginia |
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| Wyoming |
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Florida, while imposing a premium tax, grants exemption from the tax if the insurer can show the savings from the exemption is passed on to Florida policyowners. GILICO passes on the premium tax savings to Florida policyowners.
GILICO's new immediate annuity calculator has been updated for all premium tax situations in approved states. California, Nevada and Wyoming require premium taxes be paid up front on immediate annuities. Please carefully consider the premium tax in these states when quoting "payout income" to annuitants.
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