Puerto Rico Insurance Excise Tax Exemption Act of 2023
Source: Congress.gov ·
344 words in original text
What This Bill Does
This bill changes federal tax rules to exclude certain insurance policies from a tax on foreign insurers. Specifically, it exempts insurance policies issued by insurers created or organized under the laws of U.S. territories or possessions from the foreign insurer excise tax (a tax the federal government charges on certain insurance products).
Who It Affects
Insurance companies created or organized under the laws of U.S. territories or possessions that issue insurance policies, annuity contracts, indemnity bonds (a promise to protect someone from financial loss), or reinsurance policies (insurance that insurance companies buy to protect themselves).
Key Provisions
• Insurance policies, annuity contracts, indemnity bonds, and reinsurance policies issued by partnerships or corporations created or organized under the laws of any U.S. territory or possession are exempt from the foreign insurer excise tax (Sec. 2(a))
• This exemption does not apply if any of the risks or liabilities covered by the policy are covered by a reinsurance policy issued by a foreign insurer or reinsurer, unless that foreign insurer or reinsurer is also created or organized under U.S. territory or possession laws (Sec. 2(a))
What Changes
If this bill becomes law, U.S. territory and possession insurers will no longer pay the foreign insurer excise tax on certain insurance products they issue, provided those products are not reinsured through foreign insurers.
Important Definitions
None explicitly defined in the bill text.
Effective Date
The changes apply to premiums paid after the date the bill is enacted into law (Sec. 2(b)).
Important: This plain English summary was generated by AI and is provided for informational purposes only.
It is not legal advice. Always consult the official bill text on Congress.gov
or a qualified attorney for legal matters.