An Act To Exempt Annuities from Taxation
Maine Legislature, Session 124, LD 0342
Committee: Taxation
Sponsors: NASS, COURTNEY, ROSEN
Amends: 36 MRSA §2512, 36 MRSA §2513, 36 MRSA §2514

MAINE STATE LEGISLATURE 
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AUGUSTA, MAINE. 
124th MAINE L GISLATURE 
Legislative Document 
No. 342 
S.P.106 
In Senate, February 3, 2009 
An Act To Exempt Annuities from Taxation 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Senator NASS of York. 
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JOY 1. O'BRIEN 
Secretary of the Senate 
Cosponsored by Senators: COURTNEY of York, ROSEN of Hancock. 
Printed on '. ;yded !1apl', 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §2512, as amended by PL 1985, c. 783, §10, is further amended 
to read: 
§2512. Annual returns to Superintendent of Insurance 
Every domestic life insurance company shall include in its annual return to the 
Superintendent of Insurance a statement of the amount of premiums and annuity 
considerations liable to taxation as provided in section 2513, and of the real estate held by 
it on the 31 st day of the previous December, showing in detail the amount of all 
premiums including annuity considerations whether in cash or notes absolutely payable, 
received by the company from residents of this State during the preceding calendar year 
and all dividends paid to policyholders in this State on account of the premiums er 
annuity considerations as required by blanks furnished by the superintendent. The taxes 
provided by section 2513 shall must be paid as provided in section 2521-A. and this 
section and section 2518 shall be applicable thereto. 
Sec. 2. 36 MRSA §2513, as amended by PL 2007, c. 627, §52, is further amended 
to read: 
§2513. Tax on premiums 
Every insurance company or association that does business or collects premiums or 
assessments including annuity considerations in the State, including surety companies 
and companies engaged in the business of credit insurance or title insurance, shall, for the 
privilege of doing business in this State 'and in addition to any other taxes imposed for 
that privilege, pay a tax upon all gross direct premiums including, except annuity 
considerations, whether in cash or otherwise, on contracts written on risks located or 
resident in the State for insurance of life, annuity, fIre, casualty and other risks at the rate 
of 2% a year. Every surplus lines insurer that does business or collects premiums in the 
State shall, for the privilege of doing business in this State and in addition to any other 
taxes imposed for that privilege, pay a tax upon all gross direct premiums, whether in 
cash or otherwise, on contracts written on risks located or resident in the State at the rate 
of 3% a year. The producer of those contracts must collect the tax and report and pay the 
tax to the State Tax Assessor as provided in section 2521-A. For purposes of this section, 
the term "annuity considerations" includes amounts paid to an insurance company when 
received for the purchase of a contract that may result in an annuity, even when the 
annuitization never occurs or does not occur until some time in the future and the 
amounts are in the meantime applied to an investment vehicle other than an annuity. This 
section does not apply to mutual fIre insurance companies subject to tax under section 
2517 or to captive insurance companies fornied odicensed under Title 24:'A, chapter 83 
or under the laws of another state. 
. Nohvithstanding this section a11ff' it ' 
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Notwithstanding this section, for income tax years commencing on or after January 1, 
1989, the tax imposed by this section upon all gross direct premiums collected or 
contracted for on long-term care policies, as certified by the superintendent pursuant to 
Title 24-A, section 5054, must be at the rate of 1 % a year. 
Notwithstanding this section, for tax years commencing on or after January 1,1997, 
the tax imposed by this section with respect to premiums on qualified group disability 
policies written by every insurer, except a large domestic insurer, must be at the rate of 
% and must be at the rate of 2.55% with respect to those premiums written by every 
large domestic insurer. 
For the purposes of this section, the term "qualified group 
disability policies" is limited to group health insurance policies properly reported as such 
in the insurer's annual statement and whose sole coverage is the full or partial 
replacement of an individual's income in the event of disability. Policies that contain 
coverages in addition to replacement of income coverage are considered to solely provide 
that coverage as long as the premium related to the additional coverages is not more than 
10% of the total premium charged. The term "qualified group disability policies" does 
not include workers' compensation insurance policies, policies that include coverages that 
are collectively renewable, policies that provide for credit disability insurance or policies 
that pay benefits only upon the occurrence of hospitalization. For purposes of this 
section, a "large domestic insurer" is any insurer domiciled in this State with assets in 
excess of $5,000,000,000 as reported on its annual statement. 
Sec. 3. 36 MRSA §2514, as amended by PL 1987, c. 343, §7, is further amended 
to read: 
§2514. Applicability of provisions 
Sections 2512 and 2513 shall do not apply to the taxation of any annuity 
consideration on any annuity contract issued prior to August 1, 1943 or after October 1, 
2009. Sections 2512 and 2513 shall do not apply to any premium from an insurance 
contract, which premium is received prior to October 1, 1969, or any consideration, 
regardless of when received, from any retirement annuity contracts issued by an 
insurance or annuity company organized and operated without profit to any private 
shareholder or individual exclusively for the purpose of aiding nonproprietary educational 
and scientific institutions pursuant to a retirement program established under the United 
States Internal Revenue Code, Section 403 (b). Premiums or considerations received from 
life insurance policies or annuity contracts issued in connection with the funding of a 
deferred compensation plan described under the United States Internal Revenue Code, 
Section 457, a pension, annuity or profit-sharing plan or individual retirement account or 
annuity qualified or exempt under the United States Internal Revenue Code, Section 401, 
403, 404, 408 or 501, as now or hereafter amended or renumbered from time to time, 
shall be are exempt from tax. 
Sec. 4. Effective date. This Act takes effect October 1, 2009. 
SUMMARY 
This bill exempts annuity considerations from the tax imposed on Insurance 
premiums beginning October 1, 2009. 
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