Captive Incentives Advance in Vermont
Monday, Mar 09,2009, 2:48:40 PM Click:
Copyright 2009 A.M. Best Company, Inc.All Rights Reserved BestWire
February 20, 2009 Friday 04:29 PM EST
265 words
Captive Incentives Advance in Vermont
Sean P Carr
MONTPELIER, Vt.
The Vermont Senate approved an administration proposal to offer new tax incentives for newly registered captives in 2009 and 2010.
Under S. 42, the state would provide one-time non-refundable tax credits of $7,500 to offset premium rates. It would also raise from 10% to 12% the percentage of premium tax revenue the state can use for the regulation and promotion of the captive sector.
The state offered similar incentives from 2001 to 2003, years of sharp growth in captives. Captive registrations have dipped in Vermont, which saw 32 new captives in 2007 but 16 in 2008 (BestWire, Feb. 17, 2009).
Dave Provost, Vermont's deputy commissioner of captive insurance, attributed the drop to the economic slowdown and to a proposed U.S. Internal Revenue Service rule that would have curtailed the ability of many onshore captive insurers to set aside reserves tax-free. Captive trade groups warned it would have threatened jobs and revenue in the 28 states that have become thriving captive domiciles. The IRS withdrew the rule in February 2008 (BestWire, Feb. 21, 2008).
Captive insurers, including the Vermont Captive Insurance Association, have welcomed the measure. The incentives will bring renewed attention to the state and are sign that officials are serious about welcoming the sector, they said.
Vermont is the largest domestic captive domicile and one of the largest in the world.
The bill now goes to the state House of Representatives, where it has been referred to the Committee on Commerce and Economic Development.
(By Sean P. Carr, senior associate editor, BestWeek: Sean.Carr@ambest.com)
February 21, 2009
Copyright © 2009 LexisNexis, a division of Reed Elsevier Inc. All Rights Reserved.
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February 20, 2009 Friday 04:29 PM EST
265 words
Captive Incentives Advance in Vermont
Sean P Carr
MONTPELIER, Vt.
The Vermont Senate approved an administration proposal to offer new tax incentives for newly registered captives in 2009 and 2010.
Under S. 42, the state would provide one-time non-refundable tax credits of $7,500 to offset premium rates. It would also raise from 10% to 12% the percentage of premium tax revenue the state can use for the regulation and promotion of the captive sector.
The state offered similar incentives from 2001 to 2003, years of sharp growth in captives. Captive registrations have dipped in Vermont, which saw 32 new captives in 2007 but 16 in 2008 (BestWire, Feb. 17, 2009).
Dave Provost, Vermont's deputy commissioner of captive insurance, attributed the drop to the economic slowdown and to a proposed U.S. Internal Revenue Service rule that would have curtailed the ability of many onshore captive insurers to set aside reserves tax-free. Captive trade groups warned it would have threatened jobs and revenue in the 28 states that have become thriving captive domiciles. The IRS withdrew the rule in February 2008 (BestWire, Feb. 21, 2008).
Captive insurers, including the Vermont Captive Insurance Association, have welcomed the measure. The incentives will bring renewed attention to the state and are sign that officials are serious about welcoming the sector, they said.
Vermont is the largest domestic captive domicile and one of the largest in the world.
The bill now goes to the state House of Representatives, where it has been referred to the Committee on Commerce and Economic Development.
(By Sean P. Carr, senior associate editor, BestWeek: Sean.Carr@ambest.com)
February 21, 2009
Copyright © 2009 LexisNexis, a division of Reed Elsevier Inc. All Rights Reserved.
Terms and Conditions Privacy Policy
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