An Act To Phase Out the Insurance Premium Tax on Annuities
Maine Legislature, Session 130, LD 1062
Committee: Taxation
Sponsors: CLOUTIER, LIBBY, BICKFORD, SACHS, TERRY, WHITE, POULIOT
Amends: 36 MRSA §2513, 36 MRSA §2513-C, 36 MRSA §2515

Legislative Document
No. 1062
H.P. 791
House of Representatives, March 11, 2021
An Act To Phase Out the Insurance Premium Tax on Annuities
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative CLOUTIER of Lewiston.
Cosponsored by Senator LIBBY of Androscoggin and
Representatives: BICKFORD of Auburn, SACHS of Freeport, TERRY of Gorham, WHITE of 
Waterville, Senator: POULIOT of Kennebec.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §2513, first ¶, as amended by PL 2011, c. 331, §12 and affected 
by §§16 and 17, is further amended to read:
Every Except as provided in section 2513-C, 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 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 nonadmitted 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, as provided in section 2531.  For purposes of this 
section chapter, the term "annuity considerations" includes amounts paid to an insurance 
company for the purchase of a contract that may result in an annuity, even if 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 formed or licensed under Title 24-A, chapter 83 or under the 
laws of another state.
Sec. 2.  36 MRSA §2513-C is enacted to read:
§2513-C.  Tax on annuity considerations
1.  Phase-out of tax.  Notwithstanding the other provisions of this chapter, the rate of 
tax under this chapter for annuity considerations is 1.8% in calendar year 2022, 1.6% in 
calendar year 2023, 1.4% in calendar year 2024, 1.2% in calendar year 2025, 1% in 
calendar year 2026, 0.8% in calendar year 2027, 0.6% in calendar year 2028, 0.4% in 
calendar year 2029 and 0.2% in calendar year 2030. Beginning in calendar year 2031, 
annuity considerations are not subject to tax under this chapter, but taxes due for previous 
years may be collected.
2.  Application of reduced rate on annuities.  The reduced rates specified in 
subsection 1 for calendar years 2022 to 2030 apply to premiums on an annuity paid by 
annuity holders in this State only if the tax savings from the reduced rate are credited to the 
annuity holders. Upon request of the bureau, an insurer shall submit evidence that 
establishes that the tax savings derived from the reduced rate under this section have been 
credited to the annuity holders.
3.  Foreign insurance companies.  Section 2519 does not apply to annuity 
considerations subject to tax under this section.
Sec. 3.  36 MRSA §2515, as amended by PL 2013, c. 331, Pt. C, §11, is further 
amended to read:
§2515.  Amount of tax
In determining the amount of tax due under sections 2513 and 2531, each company 
shall deduct from the full amount of gross direct premiums the amount of all direct return 
premiums on the gross direct premiums and all dividends paid to policyholders on direct 
premiums, and the tax must be computed by those companies or their agents.  Except when 
direct return premiums are returned in the same tax year that the premium was paid, the 
deduction allowed in this section may be taken only if the tax under this Part has been paid.  
For tax periods beginning on or after January 1, 2022, the deductions under this section 
related to annuity considerations may be deducted only from annuity considerations.
SUMMARY
This bill phases out the insurance premium tax on annuity considerations over 10 years 
beginning in 2022 and provides that during the phase-out period the retaliatory tax on non-
Maine insurance companies does not apply.  The bill also specifies that certain deductions 
related to annuities may be deducted from annuity considerations for tax periods beginning 
on or after January 1, 2022.