What Florida tax returns and claim priorities applied when the Department of Insurance liquidated insurers as receiver?

Plain-English summary

The receiver remained responsible for required corporate income-tax returns, while the filing and priority results varied by tax and period. The Department of Insurance, acting as receiver, had to file corporate returns the insurer needed for both pre- and post-receivership periods.

For intangible tax, insurer assets were exempt for tax year 1999 and later under the cited statute, so the receiver had no filing obligation for those years. Returns were still required for 1998 and earlier. The ruling also found that assessments collected from members of a self-insurance fund were subject to insurance premium tax.

Taxes arising from transactions and activities after the court's liquidation order were Class 1 costs and expenses of administering the estate. Taxes arising before the order were Class 7 state-government claims.

What this means for you

Receivership did not end the entity's tax-return duties. The court-order date divided administrative expenses from older government claims, while each tax still had its own filing and exemption rules.

Common questions

Q: Did the receiver have to file corporate income-tax returns? Yes, for all required pre- and post-receivership returns.

Q: Were intangible-tax returns required after 1998? No, because the cited exemption covered insurer assets for 1999 and later.

Q: How were taxes arising after the liquidation order classified? As Class 1 administrative costs and expenses.

Q: Were collected self-insurance-fund assessments subject to premium tax? Yes, and the associated post-receivership tax claim was Class 1.

Citations and references

• Fla. Stat. §§ 199.185(8), 220.02, and 220.22 — intangible-tax exemption and corporate returns
• Fla. Stat. §§ 624.474(1) and 624.509 — self-insurance assessments and premium tax
• Fla. Stat. §§ 631.271 and 631.321 — liquidation priorities and assessments
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 02M-006

Original ruling text

SUMMARY

QUESTION 1: Does the DOI, as receiver, have an obligation
to file corporate income tax returns with the DOR, on
behalf of insurers being liquidated by the DOI, for those
tax years subsequent to the entry of orders for liquidation
and preceding the ultimate discharge/liquidation of such
insurers?

ANSWER - Based on Facts Below: Yes, the DOI, as receiver,
has an obligation to file corporate income tax returns with
the DOR, on behalf of insurers being liquidated by the DOI
for all tax returns that the corporation needs to file
(both pre and post receivership).

QUESTION 2: If the answer to question 1. is yes, and such
corporate income tax returns report a tax liability, is
this claim for payment considered a cost and expense of
administering the estate (Class 1) or a claim of state
government (Class 7), within the meaning of s. 631.271,
F.S.?

ANSWER - Based on Facts Below: The corporate income tax
returns that report a tax liability and cover periods
subsequent to the entry of orders for liquidation are
considered a cost and expense of administering the estate
(Class 1) within the meaning of s. 631.271, F.S.

QUESTION 3: Does the DOI, as receiver, have an obligation
to file intangible tax returns with the DOR, on behalf of
insurers being liquidated by the DOI, for those tax years
subsequent to the entry of orders for liquidation and
preceding the ultimate discharge/liquidation of such
insurers?

ANSWER - Based on Facts Below: For tax year 1999 and
thereafter, the DOI, as receiver, does not have an
obligation to file intangible tax returns with the DOR
because under s. 199.185(8), F.S., the assets of the
insurer are exempt from the intangible tax. For tax years
1998 and prior, the DOI, as receiver, would have an

obligation to file intangible tax with the DOR, on behalf
of insurers being liquidated by the DOI.

QUESTION 4: If the answer to question 3. is yes, and such
intangible tax returns report a tax liability, is this
claim for payment considered a cost and expense of
administering the estate (Class 1) or a claim of state
government (Class 7), within the meaning of s. 631.271,
F.S.?

ANSWER - Based on Facts Below: If such intangible tax
returns report a tax liability, the claim for payment is
considered a cost and expense of administering the estate
(Class 1) within the meaning of s. 631.271, F.S.

QUESTION 5: Assuming the DOI issues an assessment during
the post-receivership period on the members of a selfinsurance fund under the authority granted in s.
624.474(1), F.S., and the court, are such assessments, when
collected, subject to the premium tax imposed by s.
624.509, F.S.?

ANSWER - Based on Facts Below: Yes, such assessments are
included in those assessments contemplated by s. 624.509,
F.S., and are subject to the insurance premium tax.

QUESTION 6: If the answer to question 5. is yes, is this
claim for payment considered a cost and expense of
administering the estate (Class 1) or a claim of state
government (Class 7), within the meaning of s. 631.271,
F.S.?

ANSWER - Based on Facts Below: The returns and claim for
payment of such insurance premium tax due in question 5.
are considered costs and expenses of administering the
estate (Class 1) within the meaning of s. 631.271, F.S.

Jun 19, 2002

Re: Technical Assistance Advisement 02M-006
Intangible Tax, Corporate Income Tax, and Insurance Premium
Tax
Insurers in Liquidation
Sections 199.185(8), 220.02, 220.22, 624.509, F.S.

Dear :

Your letter of XX, requests a determination whether Florida
Department of Insurance (DOI), as receiver, is required to file
and pay insurance premium tax, corporate income tax, and/or
intangible tax on behalf of insurers who are placed in
liquidation. In addition, you request the Department of
Revenue's (DOR) position on whether insurance premium tax,
corporate income tax, and/or intangible tax that becomes due
after the date of the liquidation order should be prioritized as
a Class 1 or Class 7 claim. This response to your request
constitutes a Technical Assistance Advisement under Chapter 1211, Florida Administrative Code, and is issued to you under
authority of s. 213.22, Florida Statutes.

FACTS SUPPLIED BY TAXPAYER

The DOI serves as the court appointed receiver for domestic
insurance companies being liquidated under the provisions of
Chapter 631, F.S. An order of liquidation directs the DOI to
take immediate possession of the property of the insurer, to
marshal all the assets of the insurer, to liquidate the
business, and to deal with the insurer's property and business
in its own name or in the name of the insurer, as the court may
direct. The DOI is vested by operation of law with the title to
all of the property, contacts, and rights of action of the
insurer as of the date of entry of the order directing the DOI
to liquidate the insurer.

Generally the insurance policies of the insurer being liquidated
are cancelled within 30 days of the date of entry of the order
for liquidation. During the period following entry of the order
for liquidation, the DOI, as receiver, enters into the following
types of transactions:

*

sale/liquidation of the insurer's assets;

*

the collection of premiums receivable that are attributable
to the period before the entry of the order for
liquidation;

*

the return of unearned commissions paid to agents;

*

the collection of interest earned prior to and after the
entry of the order for liquidation;

*

the payment of the costs and expenses of administering the
estate; and

*

the payment of that portion of the allowable amount of the
losses of the insureds.

Losses, deductions and expenses incurred during the period
following entry of the order for liquidation generally exceed
any gains or income attributable to that period. In regards to
issue 5 below, in some instances, the insurer being liquidated
is a self-insurance fund. Section 624.471(1), F.S., provides
that the DOI may impose assessments upon the members of the
self-insurance fund in the event of liquidation.

LEGAL AUTHORITY

Section 199.185 (8), F.S., states:

Every insurer, as defined in s. 624.03, whether the insurer
is authorized or unauthorized as defined in s. 624.09, is
exempt from the tax imposed by s. 199.032.

Section 624.03, F.S., states:

"Insurer" includes every person engaged as indemnitor,
surety, or contractor in the business of entering into
contracts of insurance or of annuity.

Section 220.22, F.S., states in part:

(1) A return with respect to the tax imposed by this code
shall be made by every taxpayer for each taxable year in
which such taxpayer either is liable for tax under this
code or is required to make a federal income tax return,

regardless of whether such taxpayer is liable for tax under
this code....

(3) Whenever a receiver, trustee in bankruptcy, or
assignee, by order of law or otherwise, has possession of
or holds title to all or substantially all of the property
or business of a taxpayer, whether or not such property or
business is being operated, such receiver, trustee, or
assignee shall make the returns and notices required of
such taxpayer....

Section 624.474, F.S., states in part:

(1) The trustees of a self-insurance fund operating as a
trust, or the corporate directors of a self-insurance fund
operating as a corporation, may assess from time to time
members of a self-insurance fund liable therefor under the
terms of their policies and pursuant to this section, or
the department may assess the members in the event of
liquidation of the fund....

Section 624.475, F.S., states:

Premiums, contributions, and assessments received by a
commercial self-insurance fund are subject to ss.
624.509(1) and (2) and 624.5092, except that the tax rate
shall be 1.6 percent of the gross amount of such premiums,
contributions, and assessments.

Section 624.509, F.S., states in part:

(1) In addition to the license taxes provided for in this
chapter, each insurer shall also annually, and on or before
March 1 in each year, except as to wet marine and
transportation insurance taxed under s. 624.510, pay to the
Department of Revenue a tax on insurance premiums, premiums
for title insurance, or assessments, including membership
fees and policy fees and gross deposits received from
subscribers to reciprocal or interinsurance agreements, and
on annuity premiums or considerations, received during the
preceding calendar year, the amounts thereof to be

determined as set forth in this section, to wit:

(a) An amount equal to 1.75 percent of the gross amount of
such receipts on account of life and health insurance
policies covering persons resident in this state and on
account of all other types of policies and contracts
(except annuity policies or contracts taxable under
paragraph (b)) covering property, subjects, or risks
located, resident, or to be performed in this state,
omitting premiums on reinsurance accepted, and less return
premiums or assessments, but without deductions:

1. For reinsurance ceded to other insurers;

2. For moneys paid upon surrender of policies or
   certificates for cash surrender value;

3. For discounts or refunds for direct or prompt payment of
   premiums or assessments; and

4. On account of dividends of any nature or amount paid and
   credited or allowed to holders of insurance policies;
   certificates; or surety, indemnity, reciprocal, or
   interinsurance contracts or agreements; and

(b) An amount equal to 1 percent of the gross receipts on
annuity policies or contracts paid by holders thereof in
this state.

(2) Payment by the insurer of the license taxes and premium
receipts taxes provided for in this part of this chapter is
a condition precedent to doing business within this
state....

Section 631.061, F.S., states:

The department [Department of Insurance] may apply to the
court for an order appointing it as receiver (if its
appointment as receiver is not then in effect) and
Technical Assistance Advisement 02M-006 directing it to
liquidate the business of a domestic insurer or of the

United States branch of an alien insurer having trusteed
assets in this state, regardless of whether or not there
has been a prior order directing it to rehabilitate such
insurer, upon any of the grounds specified in s. 631.051,
or if such insurer:

(1) Is or is about to become insolvent.

(2) Is an insolvent insurer and has commenced or is
attempting to commence voluntary liquidation or dissolution
except under this code.

(3) Has not completed its organization and obtained a
certificate of authority as an insurer within the time
allowed therefor under any applicable law.

Section 631.111, F.S., states:

(1) An order to liquidate the business of a domestic
insurer shall direct the department forthwith to take
immediate possession of the property of the insurer, to
marshal all the assets of the insurer, to liquidate its
business, to deal with the insurer's property and business
in its own name or in the name of the insurer, as the court
may direct, and to give notice to all creditors who may
have claims against the insurer to present such claims, as
the court may direct.

(2) The order of liquidation shall authorize and direct the
department to take immediate possession of all the
property, assets, and estate, including, but not limited
to, all offices maintained by the insurer and all rights of
action, books, documents, papers, evidences of debt, and
all other property of every kind whatsoever and wheresoever
located belonging to the insurer, including, but not
limited to, all bank accounts, stocks, bonds, debentures,
mortgages, all premiums collected by premium finance
companies or any person otherwise engaged in premium
financing, agents, subagents, producing agents, brokers,
solicitors, service representatives, or others and not paid
to the insurer, furniture, fixtures, equipment, office

supplies, and all real property of the insurer and to hold
all such assets pending further orders of the court.

(3) The department may apply for and secure an order
dissolving the corporate existence of a domestic insurer
upon its application for an order of liquidation of such
insurer or at any time after such order has been granted.

Section 631.141, F.S., states:

(1) Whenever under this chapter a receiver is to be
appointed in a delinquency proceeding for a domestic or
alien insurer, the court shall appoint the department as
such receiver. The court shall order the department
forthwith to take possession of the assets of the insurer
and to administer the same under the orders of the court.

(2) As a domiciliary receiver, the department is vested by
operation of law with the title to all of the property,
contracts, and rights of action, and all of the books and
records, of the insurer, wherever located, as of the date
of entry of the order directing it to rehabilitate or
liquidate a domestic insurer or to liquidate the United
States branch of an alien insurer domiciled in this state;
and it shall have the right to recover the same and reduce
the same to possession; except that ancillary receivers in
reciprocal states shall have, as to assets located in their
respective states, the rights and powers which are herein
prescribed for ancillary receivers appointed in this state
as to assets located in this state.

(3) The filing or recording of the order directing
possession to be taken, or a certified copy thereof, in any
office where instruments affecting title to property are
required to be filed or recorded imparts the same notice as
would be imparted by a deed, bill of sale, or other
evidence of title duly filed or recorded.

(4) The department as domiciliary receiver is responsible
for the proper administration of all assets coming into its
possession or control. The court may at any time require a

bond from it or its agents if deemed desirable for the
protection of such assets.

(5) Upon taking possession of the assets of an insurer, the
domiciliary receiver shall, subject to the direction of the
court, immediately proceed to conduct the business of the
insurer or to take such steps as are authorized by this
chapter for the purpose of rehabilitating, liquidating, or
conserving the affairs or assets of the insurer.

(6) In connection with a delinquency proceeding, the
department may appoint one or more special agents to act
for it, and it may employ such counsel, clerks, and
assistants as it deems necessary. The compensation of the
special agents, counsel, clerks, or assistants and all
expenses of taking possession of the insurer and of
conducting the proceeding shall be fixed by the receiver,
subject to the approval of the court, and shall be paid out
of the funds or assets of the insurer. Within the limits of
duties imposed upon them, special agents shall possess all
the powers given to and, in the exercise of those powers,
shall be subject to all duties imposed upon the receiver
with respect to such proceeding.

(7) The department as domiciliary receiver may take such
action as it deems necessary or appropriate to reform and
revitalize the insurer. The department shall have all the
powers of the directors, officers, and managers, whose
authority shall be suspended, except as they are
redelegated by the receiver. The receiver shall have full
power to direct and manage the affairs of the insurer, to
hire and discharge employees, and to deal with the property
and business of the insurer.

(8) If the department as domiciliary receiver determines
that reorganization, consolidation, conversion,
reinsurance, merger, or other transformation of the insurer
is appropriate, it shall prepare a plan to effect such
changes. Upon application of the receiver for approval of
the plan, and after such notice and hearings as the court
may prescribe, the court may either approve or disapprove

the plan proposed or may modify it and approve it as
modified. Any plan approved under this section must be, in
the judgment of the court, fair and equitable to all
parties concerned. If the plan is approved, the receiver
shall carry out the plan.

(9) Records created by the entity in receivership shall be
disposed of in accordance with the order of the court at
such time as the receiver determines that the records are
not needed for the administration of the estate.

Section 631.271, F.S., states in part:

(1) The priority of distribution of claims from the
insurer's estate shall be in accordance with the order in
which each class of claims is set forth in this subsection.

Every claim in each class shall be paid in full or adequate
funds shall be retained for such payment before the members
of the next class may receive any payment. No subclasses
may be established within any class. The order of
distribution of claims shall be:

(a) Class 1.--

1. All of the receiver's costs and expenses of
   administration.

2. All of the expenses of a guaranty association or foreign
   guaranty association in handling claims....

(g) Class 7.--Claims of any state or local government.
Claims, including those of any state or local government
for a penalty or forfeiture, shall be allowed in this
class, but only to the extent of the pecuniary loss
sustained from the act, transaction, or proceeding out of
which the penalty or forfeiture arose, with reasonable and
actual costs occasioned thereby. The remainder of such
claims shall be postponed to the class of claims under
paragraph (j)....

Section 631.321, F.S., states in part:

(1) Upon the filing and reading of the report and petition
provided for in s. 631.311, the court, ex parte, may order
the department to assess all members or subscribers of the
insurer who may be subject to such an assessment, in such
an aggregate amount as the court finds reasonably necessary
to pay all valid claims as may be timely filed and proved
in the delinquency proceeding, together with the costs and
expenses of levying and collecting assessments and the
costs and expenses of the delinquency proceeding in full.
Any such order shall require the department to assess each
such member or subscriber for her or his proportion of the
aggregate assessment, according to such reasonable
classification of such members or subscribers and formula
as may be made by the department and approved by the court.

(2) The court may order additional assessments upon the
filing and reading of any amendment or supplement to the
report and petition referred to in subsection (1), if such
amendment or supplement is filed within 3 years after the
date of the entry of the order of rehabilitation or
liquidation.

(3) After the entry of the order to levy an assessment upon
members or subscribers of an insurer referred to in
subsection (1) or subsection (2), the department shall levy
an assessment upon such members or subscribers in
accordance with the order.

(4) The total of all assessments against any member or
subscriber with respect to any policy, whether levied
pursuant to this chapter or pursuant to any other provision
of this code, shall be for no greater amount than that
specified in the policy or policies of the member or
subscriber and as limited under this code; except as to any
policy which was issued at a rate of premium below the
minimum rate lawfully permitted for the risk insured, in
which event the assessment against any such policyholder
shall be upon the basis of the minimum rate for such
risk....

ISSUES PRESENTED

1. Does the DOI, as receiver, have an obligation to file
   corporate income tax returns with the DOR, on behalf of insurers
   being liquidated by the DOI, for those tax years subsequent to
   the entry of orders for liquidation and preceding the ultimate
   discharge/liquidation of such insurers?

2. If the answer to issue 1. is yes, and such corporate income
   tax returns report a tax liability, is this claim for payment
   considered a cost and expense of administering the estate (Class
   1) or a claim of state government (Class 7), within the meaning
   of s. 631.271, F.S.?

3. Does the DOI, as receiver, have an obligation to file
   intangible tax returns with the DOR, on behalf of insurers being
   liquidated by the DOI, for those tax years subsequent to the
   entry of orders for liquidation and preceding the ultimate
   discharge/liquidation of such insurers?

4. If the answer to issue 3. is yes, and such intangible tax
   returns report a tax liability, is this claim for payment
   considered a cost and expense of administering the estate (Class
   1) or a claim of state government (Class 7), within the meaning
   of s. 631.271, F.S.?

5. Assuming the DOI issues an assessment during the postreceivership period on the members of a self-insurance fund
   under the authority granted in s. 624.474(1), F.S., and the
   court, are such assessments, when collected, subject to the
   premium tax imposed by s. 624.509, F.S.?

6. If the answer to issue 5. is yes, is this claim for payment
   considered a cost and expense of administering the estate (Class
   1) or a claim of state government (Class 7), within the meaning
   of s. 631.271, F.S.?

DISCUSSION AND ANALYSIS

The purpose of Chapter 631, F.S., is to protect the interests of

the insureds, creditors, and the public in general. Under s.
631.061, F.S., the DOI may apply to the court for an order
appointing it as the receiver and directing it to liquidate the
business of an insurer, provided certain criteria are met. The
court's order to liquidate the business of a domestic insurer
shall direct the DOI to take immediate possession of the
property of the insurer, to marshal all the assets of the
insurer, to liquidate its business, and to deal with the
insurer's property and business in its own name or in the name
of the insurer. In light of the responsibility to liquidate the
insurer, the DOI is vested by operation of law with the title to
all of the insurer's property.

Although the Florida DOI, as trustee, is vested with the title
of all of the insurer's property, it is not considered an arm of
the Government. "The trustee is in fact the representative of
the estate." See California State Board of Equalization v.
Sierra Summit, Inc., 109 S.Ct. 2228 (1989). As a representative
and administrator of an estate, the DOI is not exempt from
paying taxes that are generated by and through the
administration of that estate. The DOI is responsible for
filing and paying taxes that accrue or become due during its
administration of the insurer.

Section 631.271(1), F.S., provides the priority for distribution
of claims from the insurer's estate. The first class ("Class 1")
is all of the receiver's (DOI's) costs and expenses of
administration. This priority for administrative expenses is
common throughout the various bankruptcy laws. The U.S. Supreme
Court stated "without payment of administrative costs,
liquidation could not even commence." See United States
Department of the Treasury and Mitchell A. Levine, Assistant
Commissioner v. George Fabe, Superintendent of Insurance of
Ohio, 113 S.Ct. 2202 (1993).

Section 631.271, F.S., uses the term "costs and expenses of
administration" for Class 1 claims, but neither the Florida
Statutes nor the Florida Administrative Code further defines
this phrase. However, this phrase and terminology are commonly
used in other various bankruptcy proceedings. In those
instances where a definition is available, the costs and

expenses of administration are generally those costs that are
incurred by the receiver after the court's order appointing the
receiver. These administrative expenses generally include the
actual, necessary costs and expenses of preserving the estate.
This includes wages, salaries, or commissions for services
rendered by the receiver, along with any other obligations,
including taxes that are incurred after the court order
appointing the receiver. See U.S.C. Title 11, Chapter 5,
Subchapter 1, Section 503. Also see In re Swann, 149 B.R. 137,
144-46 (Bankr. D. S. D. 1993).

In Bright et al. v. State of Arkansas, 249 F. 950 (1918), the
court stated:

In view of the uniform decisions of the federal courts upon
the question here at issue, and of the great weight of
authority in favor of the practice they have adopted, the
conclusion is that receivers of the property of
corporations, which would have been liable to pay taxes
accruing during the receivership for the privilege of
exercising corporate powers, should be directed by the
courts of equity controlling such receivers to pay such
taxes as [they] accrue while they are operating the
property and before they surrender it to purchasers or
others,....

In reaching its decision, the Court cited several cases
concerning receivers that held "by the great weight of modern
authority, that courts of equity, operating the property and
liquidating the debts of corporations, which would otherwise
have been liable to pay such taxes, ought to direct payment by
their receivers of such taxes as would have accrued during the
time the receivers were actually operating the property."

All of this case law indicates that taxes that arise after date
of the court's order appointing the receiver are administrative
taxes/expenses. These administrative expenses, per s. 631.271,
F.S., have a priority of Class 1. The U.S. Supreme Court had
realized the importance of these administrative taxes/expenses
in its rulings. In contrast, taxes that arose prior to the date
of the court's order appointing the receiver are not

administrative expenses. These taxes, per s. 631.271, F.S.,
have a priority of Class 7.

In light of the discussion above, answers to each issue are
listed separately below.

1. Yes, the DOI, as receiver, has an obligation to file
   corporate income tax returns with the DOR, on behalf of insurers
   being liquidated by the DOI for all tax returns that the
   corporation needs to file (both pre and post receivership). The
   case law is clear on this issue. In addition, s. 220.22(3),
   F.S., specifically contemplates a receiver having control over a
   corporation in bankruptcy and requires the filing of returns by
   the fiduciary.

2. The corporate income tax returns under #1 that report a tax
   liability and cover periods subsequent to the entry of orders
   for liquidation are considered a cost and expense of
   administering the estate (Class 1) within the meaning of s.
   631.271, F.S. Taxes, such as the Florida corporate income tax,
   that arise after the date the receiver is appointed are commonly
   considered a cost of administering an estate.

3. For tax year 1999 and thereafter, the DOI, as receiver, does
   not have an obligation to file intangible tax returns with the
   DOR, on behalf of insurers being liquidated by the DOI, for
   those tax years subsequent to the entry of orders for
   liquidation and preceding the ultimate discharge/liquidation of
   such insurers. Under s. 199.185(8), F.S., the assets of the
   insurer are exempt from the intangible tax. This exemption is
   effective beginning with the 1999 tax year. For tax years 1998
   and prior, the DOI, as receiver, would have an obligation to
   file intangible tax returns with the DOR, on behalf of insurers
   being liquidated by the DOI, for those tax years subsequent to
   the entry of orders for liquidation and preceding the ultimate
   discharge/liquidation of such insurers.

4. If such intangible tax returns under #3 report a tax
   liability, the claim for payment is considered a cost and
   expense of administering the estate (Class 1) within the meaning
   of s. 631.271, F.S. Taxes, such as the Florida intangible tax,

that arise after the date the receiver is appointed are commonly
considered a cost of administering an estate.

5. Under s. 631.321, F.S., the DOI may make an assessment
   against all members or subscribers of the insurer. These
   assessments may be in an amount that the court finds reasonably
   necessary to pay all valid claims in the delinquency proceeding,
   together with the costs and expenses of levying and collecting
   assessments and the costs and expenses of the delinquency
   proceeding in full. Since the DOI is acting in the shoes of the
   insurer, these assessments are considered to be assessments of
   the insurer. These assessments are therefore included in those
   assessments contemplated by s. 624.509, F.S., and are subject to
   the insurance premium tax.

In addition, as we have determined above, taxes that arise after
the date the receiver is appointed are commonly considered a
cost of administering an estate. As such, they should be
included in the assessment against all members or subscribers of
the insurer under s. 631.321, F.S. Therefore, the DOI
assessments during the post-receivership period on the members
of a self-insurance fund under the authority granted in s.
624.474(1), F.S., and the court, are subject to the premium tax
imposed by s. 624.509, F.S., when received.

6. The returns and claim for payment of such insurance premium
   tax due in #5 are considered costs and expenses of administering
   the estate (Class 1) within the meaning of s. 631.271, F.S. In
   general, taxes, such as the Florida insurance premium tax, that
   arise after the date the receiver is appointed are commonly
   considered a cost of administering an estate.

CONCLUSION

Based on the above, assessments under s. 631.321, F.S., are
subject to the insurance premium tax contained in s. 624.509,
F.S. Florida taxes, such as the corporate income tax, insurance
premium tax, and intangible tax, that arise from transactions
and activities after the date of the court's order appointing
the DOI as receiver are administrative expenses and are Class 1
assessments. Florida taxes, such as the corporate income tax,

insurance premium tax, intangible tax and sales tax, that arose
prior to the date of the court's order appointing the receiver
are Class 7 assessments.

This response constitutes a Technical Assistance Advisement
under s. 213.22, F.S., which is binding on the Department only
under the facts and circumstances described in the request for
this advice as specified in s. 213.22, F.S. Our response is
based on those facts and specific situation summarized above.
You are advised that subsequent statutory or administrative rule
changes or judicial interpretations of the statutes or rules
upon this advice is based may subject future transactions to a
different treatment than expressed in this response.

You are further advised that this response, your request and
related backup documents are public records under Chapter 119,
F.S., and are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Confidential information must be
deleted before public disclosure. In an effort to protect
confidentiality, we request you provide the undersigned with an
edited copy of your request for Technical Assistance Advisement,
the backup material and this response, deleting names, addresses
and any other details which might lead to identification of the
taxpayer. Your response should be received by the Department
within 15 days of the date of this letter.

Sincerely,

Robert DuCasse
Technical Assistance and Dispute
Resolution

RCD/rd
Control No. 49778