Premium Tax Service
If you've seen the published premium tax schedules, you know that calculating the correct tax can be a complex and time-consuming task.
Eyeballing ordinary road maps to figure out your customers' tax jurisdictions isn't accurate and absorbs hours of valuable staff time. And a simple clerical error could turn into a costly compliance problem with state regulators.
But now, you can cut through the confusion with LOCATION® Premium Tax Service — a tool that helps you quickly and accurately determine local premium taxes.
The service is available in Delaware, Florida, Kentucky, Illinois, Mississippi, New York, and South Carolina. ISO will add more states in the future.
Attention Kentucky insurers
If you issued or renewed more than 2,000 total policies in Kentucky in 2009, you must begin using a verified risk location system as of January 1, 2010. LOCATION Premium Tax Service was the first risk location system verified by the Kentucky Department of Insurance as meeting its acceptance criteria. The Kentucky Department of Insurance Market Conduct Division uses LOCATION Premium Tax Service as an examination tool to audit premium tax assignments.
Here's how it works
LOCATION Premium Tax Service merges the most comprehensive postal, parcel, and street databases with state-of-the-art geographic information systems (GIS) technology to determine each policyholder’s correct location and premium tax. The service also indicates if insureds are in multiple tax zones.
The boundaries of jurisdictions assessing premium taxes can frustrate insurer efforts to assign the proper tax codes because:
- your customers’ postal addresses can differ from the municipalities or fire districts that collect taxes
- the boundary lines of many cities, towns, and fire districts are difficult to decipher and change frequently
- an individual may be subject to taxation by more than one jurisdiction
LOCATION Premium Tax Service combines geographic databases of up-to-date information on municipal and fire district boundaries with premium tax information from state departments of insurance and other government agencies.
LOCATION Premium Tax Service comes to you as a flat-file database in convenient tab-delimited format. The service is available online or on CD.
All the data you need
LOCATION Premium Tax Service gives you:
- the appropriate tax codes
- the name of the tax territory
- alternative tax-territory names and codes for properties subject to multiple taxes
- the lines of business subject to premium tax
- the tax rate by line of business
- the type of tax
- the tax revision date, reflecting the latest update
ZIP codes and city names don't help much when you're figuring premium taxes
In Kentucky, ZIP code 40222 alone has seven different premium tax zones. The Jefferson County premium tax zone spans ZIP codes 40207, 40222, and 40242. And policyholders on streets like Westport Road — running through numerous ZIP codes and municipalities — could be in any of several tax jurisdictions. In fact, some states prohibit the use of five-digit ZIP codes as the only method for premium tax assignment.
Want to know more?
To find out how you can get LOCATION — or to get in touch with a sales representative — contact ISO. You can also call us at 1-800-888-4476.
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