Opinion ID: 1748304
Heading Depth: 1
Heading Rank: 3

Heading: retaliatory tax

Text: Next, we affirm that portion of the judgment under review that upholds section 624.429 [12] against the Equal Protection and Privileges and Immunities challenges. As noted by the trial court, Florida's retaliatory tax is similar in structure to the retaliatory tax that was upheld against similar challenges in Western & Southern Life. Section 624.429(1), [13] imposes a tax upon a foreign insurer doing business in Florida equal to the difference between all taxes, licenses, and fees imposed on Florida insurers by the foreign insurer's state or country of domicile and all taxes, including premium taxes, licenses, and fees imposed on the foreign insurer by the State of Florida. In addition to taxes and fees, section 624.429(1) also imposes on a foreign insurer fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions, that are imposed on Florida insurers by the other jurisdiction and are in excess of similar obligations imposed on the foreign insurer by Florida law. The Taxpayers' Privileges and Immunities challenge was properly rejected in light of the clear pronouncement in Western & Southern Life that the Privileges and Immunities Clause of the United States Constitution is inapplicable to corporations such as the Taxpayers. 451 U.S. at 656, 101 S.Ct. at 2077. Western & Southern Life also made clear that retaliatory taxes, which have been a common feature of insurance taxation for over a century, are rationally related to the states' legitimate interest in promoting the interstate business of domestic insurers by deterring other States from enacting discriminatory or excessive taxes. Id. at 668, 101 S.Ct. at 2083. Because it is at least fairly debatable that the Florida legislature enacted section 624.429 with this well recognized purpose in mind, the Equal Protection challenge also was properly rejected. Id. at 674, 101 S.Ct. at 2086. Next, the Taxpayers contend that by tying the retaliatory tax to the laws of other jurisdictions, which may change from year to year, the legislature has unconstitutionally delegated to other legislatures its authority to determine the amount of tax due the State of Florida. We do not agree. Article II, section 3 of the Florida Constitution provides: The powers of the state government shall be divided into legislative, executive and judicial branches. No person belonging to one branch shall exercise any power appertaining to either of the other branches unless expressly provided herein. This mandate has been construed to prohibit the legislature, absent constitutional authority to the contrary, from delegating its legislative power to others. D'Alemberte v. Anderson, 349 So.2d 164 (Fla. 1977). It is true that we have consistently held that it is an unconstitutional delegation of legislative power for the legislature to adopt future legislative or administrative actions of jurisdictions outside Florida. See, e.g., Eastern Air Lines, Inc. v. Dept. of Revenue, 455 So.2d 311, 314 (Fla. 1984), appeal dismissed, 474 U.S. 892, 106 S.Ct. 213, 88 L.Ed.2d 214 (1985); State v. Welch, 279 So.2d 11 (Fla. 1973); Freimuth v. State, 272 So.2d 473, 476 (Fla. 1972). However, in this case, incorporation of future enactments of foreign jurisdictions into the formula for measuring Florida's retaliatory tax is entirely consistent with the recognized objective of such taxes  affecting the taxing policies of other jurisdictions. It is only logical that if the tax is to achieve its intended purpose, it must operate in relation to both current and future enactments and policies of other jurisdictions that burden Florida insurers. It follows that incorporation of future enactments of a foreign insurer's state of domicile as a reference point for determining the retaliatory tax due from that insurer in no way substantively changes the law. The legislature has merely set forth the manner, consistent with the underlying legislative objective, by which the Department of Revenue is to determine the tax due under section 624.429. See Eastern Air Lines, 455 So.2d at 316. This is conceptually no different than the statutory provision which was upheld in Eastern Air Lines wherein the legislature directed the Department of Revenue to measure a change in fuel tax burden by as-yet-unpromulgated versions of the federal Consumer Price Index. 455 So.2d at 316; See also Gindl v. Department of Education, 396 So.2d 1105 (Fla. 1979) (upheld statutory provision that required a computation based on the most recent publication of the Florida Price Level Index). Accordingly, we also affirm the trial court's rejection of this challenge to section 624.429.