Garamendi Will Not Appeal BOE Decision on WC Premium Tax

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Feb. 28, 2003 Share this on FacebookTweet thisEmail this to a friend

Insurance Commissioner John Garamendi announced that he would allow to stand the Board of Equalization's (BOE) unanimous decision to not apply a gross premium tax on workers' compensation reimbursements.

"In the unlikely event we were able to convince the Board of Equalization to change its position and impose the tax on workers' compensation deductibles, it is likely the insurance industry would sue the state leading to years of litigation and ultimately ending up in the Supreme Court. With the workers' compensation insurance market already in turmoil, more uncertainty is the last thing we need. This is an issue for the Legislature to decide," said Garamendi.

However, this big victory for employers and insurers may be temporary. The commissioner also indicated that the department would recommend to the Legislature this year that the gross premium tax be imposed on workers' compensation deductibles in the future.

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