Comptroller's ReportDear Readers:
USAA Insurance Company has filed a lawsuit against me, as Comptroller, demanding a tax refund of more than $200 million. USAA argues that it should not have been required to pay sales tax, use tax, gasoline tax and motor vehicle tax because it is only required to pay a gross premium tax—nothing more.
10 Principles for Texas
in the 21st Century
- Develop a better-educated workforce
- Direct more of every education dollar into the classroom
- Raise the bar on student performance
- Cut taxes in Texas
- Introduce competition into Texas government
- Improve government performance and accountability
- Reduce the size of government
- Bring common sense to regulations
- Use technology to cut costs and increase quality
- Return control to communities and individuals
All other businesses, large and small, pay these taxes but USAA insists that even though it has paid such taxes over many years, without any complaint, it now wants the money back.
I vow to use every weapon in this agency’s arsenal to fight this battle. If all of the insurance companies were to demand and receive such an undeserved refund, it could cost our state billions and destroy our state budget.
The sales tax, passed in 1961, as well as other taxes, provides for certain exemptions for charitable organizations and the like, but nowhere in the Tax Code are insurance companies exempt from any of these taxes that USAA now complains of. Instead, USAA wants to rely on a 1907 law that provided for an occupation tax in the form of a gross premium tax.
The gross premium tax is intended to be an occupation tax for insurance companies for the right to do business in Texas, which is similar to corporations paying franchise tax for the privilege of doing business. It is not meant to be a substitute for all other taxes insurance companies must pay.
USAA has already been reimbursed for these tax expenses by including them in their premiums. Now they want to get the same money all over again. It is difficult to believe.
As Comptroller, I believe these tax dollars belong in the classroom, not in the pockets of insurance companies and lawyers.
Carole Keeton Rylander