Opinion ID: 3006936
Heading Depth: 3
Heading Rank: 1

Heading: Retaliatory Tax Statutes

Text: At issue is the scope and applicability of Tennessee‘s retaliatory tax statute, which provides, in pertinent part, as follows: When, by the laws of any other state or foreign country, any premium or income or other taxes, or any fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions are imposed upon Tennessee insurance companies doing business in the other state or foreign country, or upon their agents in the other state or foreign country, that are in excess of the taxes, fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions imposed upon the insurance companies of the other state or foreign country doing business in this state, or that might seek to do business in this state, or upon their agents in the state, so long as the laws continue in force, the same premium or income or other taxes, or fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions and restrictions of whatever kind shall be imposed upon the companies of the other state or foreign country doing business in this state, or upon their agents in this state. . . . This section shall be applied on a retaliatory basis without consideration of any reciprocity an insurance company domiciled in another state or foreign country may claim due to lower premium or income or other taxes, or lower fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions that are imposed upon the 4 The only facts in dispute are the amounts of the retaliatory taxes potentially owed by the Claimants. This factual dispute has no bearing on our resolution of this appeal. -5- insurance companies of other states or foreign countries doing business in this state. Tenn. Code Ann. § 56-4-218(a). ―The legislative purpose of the retaliatory insurance tax statute . . . is to protect Tennessee insurance companies by encouraging foreign jurisdictions not to impose heavier burdens on Tennessee companies than Tennessee imposes upon their companies who come here to do business.‖ Republic Ins. Co. v. Oakley, 637 S.W.2d 448, 451 (Tenn. 1982).5 In consequence, the dispositive question in the case before us is whether any taxes, fees, charges, fines, penalties, licenses, deposit requirements or other obligations, prohibitions, or restrictions are imposed upon Tennessee insurance companies doing business in Pennsylvania that are in excess of the taxes, fees, charges, fines, penalties, licenses, deposit requirements or other obligations, prohibitions, or restrictions imposed upon Pennsylvania insurance companies doing business in Tennessee.