Early last week Governor Doug Ducey signed HB2568 (Insurance Premium Tax Reduction) into law, which aims to reduce the inequality between the insurance premium tax and the corporate income tax. The Greater Phoenix Chamber of Commerce, along with many other chambers, supported this bill and believes fair and equitable practices and applications of tax policy are paramount in increasing Arizona’s competitiveness and incentivizing business retention.
The current insurance premium tax rate of 2 percent is approximately equivalent to a 25 percent corporate tax rate. Reducing the premium tax to 1.7 percent over the next several years will begin to mend what is a substantial inequality for this industry in Arizona. Additionally, reducing the insurance premium rate will boost our state’s economy, allow insurance companies to create more jobs in the region, and reduce the inequality between the insurance premium tax and the corporate income tax.
We are focused on the health of our existing businesses in the region and are actively working to retain and expand them. Specifically, the insurance industry contributes greatly to Arizona communities through job creation, services, and investments. Property and casualty insurance companies have invested nearly $9 billion in Arizona municipal bonds. According to the U.S. Bureau of Labor Statistics, there are more than 27,000 insurance professionals across Arizona and they are integral, involved, and valued community members. With HB2568 being signed into law, Arizona is on the right path toward growing the insurance industry even more.