Source: http://texas-opinions.com/08-First-American-Title-Ins-Co-v-Combs-Comptroller-Tex-2008-by-Willett-taxation-of-out-of-state-insurers-retaliatory-tax-of-foreign-insurance-companies.html
Timestamp: 2019-04-23 15:59:13+00:00

Document:
GREGG ABBOTT, ATTORNEY GENERAL OF TEXAS; from Travis County; 3rd district (03-04-00342-CV, 169 S.
increased the tax liability of certain non-Texas title insurers.
independent of title insurance companies.
companies operating within the State, Texas-based or not, are subject to the premium tax.
title insurers selling insurance there than Texas imposes on foreign title insurers selling insurance here.
agent’s portion of the premium and remits it to the State.
earned by an insurance company or an insurance agent, but the parties disagree on whom the tax is imposed.
title insurance companies under the retaliatory tax provision.
implemented an integrated system of taxation with the insurance company acting as the central collection point.
cannot be counted as a burden meriting inclusion in the retaliatory tax calculation.
risk of Article 4.05 sanctions for failing to pay the full amount of the premium tax.
tax—insurers will face statutory consequences only if they fail to remit their own portion of the premium tax.
premium tax that it owes.
upon a similar insurance company of such other state or territory doing business in this State . . . .
taxes imposed by Texas and their home states, the provision also requires them to compare “other obligations .
and remit the full amount of the premium tax to the State.
remitting the full premium tax do not qualify as “other obligations” under Article 21.46.
consideration the burdens placed “on the insurance industry”—both the insurer and associated agents.
that ensures that all foreign insurers will pay retaliatory taxes, thus generating additional revenue for the State.
21.46 is clear: the payor matters. The dissent’s assertion that “[t]his tax was based on the burden imposed . . .
on a single entity—the insurance company.
total taxes, then the retaliatory tax would properly apply to equalize the total taxes paid.
established the agent–insurer pass-through premium tax collection system, which is all we require.
Insurance Code; therefore, we reject the insurers’ statutory claim.
Comptroller’s interpretation of the relevant statutes does not violate the insurers’ equal protection rights.
review requires us to answer two questions: “(1) Does the challenged legislation have a legitimate purpose?
of protecting Texas title insurers by pressuring other states to keep their premium taxes low.
reject the insurers’ federal and state equal protection claims.
(amending an earlier statute by specifically including title insurance companies in the premium tax scheme).
May 23, 1951, 52nd Leg., R.S., ch. 491, § 4, 1951 Tex. Gen. Laws 868, 1093.
written from 2001 to 2002, the tax years in controversy here.
split of the premium between insurer and agent).
223.001-.011) [hereinafter Former Tex. Ins. Code art. 9.59].
 Former Tex Ins. Code art. 9.59, § 8(b).
2003 Tex. Gen. Laws 3611, 4138 (current version at Tex. Ins. Code §§ 281.001-.007) [hereinafter Former Tex.
 W. & S. Life Ins. Co. v. State Bd. of Equalization, 451 U.S. 648, 668 (1981).
(B)) (current version at 34 Tex. Admin. Code § 3.831(4)(B)).
 169 S.W.3d 298, 302-03, 313.
 VanDevender v. Woods, 222 S.W.3d 430, 433 (Tex. 2007).
 State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006).
Boerne, 111 S.W.3d 22, 29 (Tex. 2003)).
 Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644, 651 (Tex. 2006).
Corporations Doing Business Within State, 91 A.L.R. Ann. 795 (1934)).
 Calvert v. Tex. Pipe Line Co., 517 S.W.2d 777, 781 (Tex. 1974).
 Tarrant Appraisal Dist. v. Moore, 845 S.W.2d 820, 823 (Tex. 1993).
 Former Tex. Ins. Code art. 21.46, § 1(a).
 Former Tex. Ins. Code art. 9.59, § 3(c).
 Tarrant Appraisal Dist., 845 S.W.2d at 823.
 Former Tex. Ins. Code art. 9.59, § 1.
mechanism and face liability for their failure to do so. See I.R.C. § 6672(a) (2006); Okla. Tax Comm’n v.
employers, bear the burden of income tax); City of Farrell v. Sharon Steel Corp., 41 F.3d 92, 97 n.6 (3d Cir.
Markos Gurnee P’ship, 163 B.R. 124, 129 & n.4 (Bankr. N.D. Ill. 1993) (internal quotation marks omitted)).
insurer form lists 100% of the premium tax as an expense; the title agent form does not list premium tax at all.
(current version at Tex. Ins. Code § 203.002).
 34 Tex. Admin. Code § 3.831(4)(C).
 Former Tex. Ins. Code art. 21.46, § 1(a) (emphasis added).
 Former Tex. Ins. Code art. 9.59, § 5.
operating in Texas exceeds the total taxes on premiums earned by Texas title insurers operating elsewhere.
payment. Having rejected that interpretation of Article 9.59, we also reject this argument.
pays $17.97 in retaliatory tax. ___ S.W.3d ___.
 Former Tex. Ins. Code art. 9.59, § 4.
after the 1987 amendments to Article 9.59. See Act of June 1, 1987, 70th Leg., R.S., ch. 1073, § 22, 1987 Tex.
Gen. Laws 3610, 3638-39 (amended 1993, 1997, 1999, 2001 and repealed 2003); supra note 13.
 Bell v. Low Income Women of Tex., 95 S.W.3d 253, 266 (Tex. 2002).
 Id. at 670 (citation omitted).
 Id. at 672 (emphasis omitted).

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