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1996 SESSION

965622296
HOUSE JOINT RESOLUTION NO. 202
Offered January 22, 1996
Establishing a joint subcommittee to examine Virginia's gross receipts tax imposed on insurance companies.
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Patrons-- Howell; Senator: Chichester
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Referred to Committee on Rules
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WHEREAS, the Commonwealth taxes insurance companies on the basis of their gross receipts from insurance premiums; and

WHEREAS, gross receipts taxes have been criticized by some as being an unfair basis of taxation because it is unrelated to profitability; and

WHEREAS, insurance companies are not taxed on some segments of their business because it does not generate insurance premiums; and

WHEREAS, insurance companies are one of the last sectors of the economy which the Commonwealth still taxes on the basis of gross receipts; and

WHEREAS, insurance companies include a spectrum of different types of companies, including property, casualty, life, accident, and automobile insurance; and

WHEREAS, the insurance area is a growth area which is seeing new products marketed to consumers and businesses; and

WHEREAS, Virginia's taxation of insurance companies has only been studied once since 1914; and

WHEREAS, Virginia possesses a golden opportunity to attract insurance companies to expand or locate in Virginia if our state tax structure is competitive with other states; now, therefore, be it

RESOLVED by the House of Delegates, the Senate concurring, That a seven-member joint subcommittee be created to study the taxation of insurance companies to ensure that it is competitive with other states and equitable. The joint subcommittee will be composed as follows: four shall be members of the House of Delegates, be appointed by the Speaker of the House, and three shall be members of the Senate, to be appointed by the Senate Committee on Privileges and Elections.

The direct costs of this study shall not exceed $ 4,200.

The Division of Legislative Services shall provide staff support for the study. All agencies of the Commonwealth shall provide assistance to the subcommittee, upon request.

The joint subcommittee shall complete its work in time to submit its findings and recommendations to the Governor and the 1997 Session of the General Assembly as provided in the procedures of the Division of Legislative Automated Systems for processing legislative documents.

Implementation of this resolution is subject to subsequent approval and certification by the Joint Rules Committee. The Committee may withhold expenditures or delay the period for the conduct of the study.