USAA Studies Options Following Court Ruling
SAN ANTONIO--May 13, 2002--The following was released today by USAA.USAA Statement
"We believe that we are right on the law and we are studying the options we have as the result of today's ruling.
"USAA is owned by millions of members of America's fighting forces. We cannot understand why anyone would insist that those who defend our freedom pay more taxes to the state of Texas than the law requires.
"If we decide to appeal and prevail, any refund we ultimately receive in this case will be used to help hold the line on the cost of insurance and other financial services for the military families who depend on us."
Cyndi Taylor Krier, Vice president, Texas Governmental Relations USAA
USAA's TAX REFUND CLAIM
-- USAA, founded and based in San Antonio for the past 80 years,
provides insurance and financial services products to
America's Military fighting forces and their families around
the world.
-- In January of 2000, USAA filed a refund claim with the Texas
State Comptroller's office for taxes it discovered that it had
overpaid.
-- Article 4 of the Texas Insurance Code states that insurance
companies are required to pay premium taxes on gross revenue.
All other businesses pay taxes on net revenue, after
deductions. If such premium taxes are paid by insurance
companies, the law says that:
-- "No other tax shall be levied or collected from any
insurance carrier by the state, county, or city or any
town, but this law shall not be construed to prohibit
the levy and collection of state, county, and
municipal taxes upon the real and personal property of
such carrier."
-- "The taxes in this article shall constitute all
collectible under the laws of Texas against any such
insurance carrier, except maintenance taxes
specifically levied under the laws of Texas and
assessed by the commissioner and administered by the
comptroller."
-- Because of the language of Article 4 above, USAA was not
required to pay sales and use taxes. In other words, the
premium tax is in lieu of sales and use taxes.
-- During the 2001 legislative session, the Comptroller requested
and received a change in the law so that from now on,
insurance companies have to pay both premium taxes and sales
and use taxes. However, the legislature declined to support
the Comptroller's request to block refund claims by USAA to
recover the overpayment of taxes from the prior years.
-- Every year many Texans and Texas businesses file for and
receive refunds for overpayments of taxes. USAA discovered
that it had overpaid its taxes and is now seeking a refund, as
well.