Due to action of the Legislature during the 2001 Regular Legislative Session, it is advisable to update both your Occupational License Tax Ordinance and your Insurance Premium Tax Ordinance. To assist in this process, we are providing model ordinances. Both are included with this bulletin.

INSURANCE PREMIUM TAX CHANGES: The Insurance Premium Tax law, L. R. S. 22:1076, was amended by Act 799 at the request of the LMA, to bring the provision for the two-thirds credit in line with the state credit provisions and to clarify the application of the maximum tax. Amendments to 22:1076 specify that the maximum tax is applied separately in each jurisdiction. An insurance company which is paying the maximum tax to a municipality will still pay a tax, and may pay the maximum tax, to the parish in which the municipality is located. The amount of tax paid to the parish is based on the company’s annual gross premiums in the unincorporated area.

Additionally, L. R. S. 22:1076.1 was enacted to authorize the Louisiana Municipal Advisory and Technical Services Bureau (LaMATS) to collect Insurance Premium Tax by contract with municipalities and parishes. 22:1076.1 also allows LaMATS access to the records of the La. Department of Insurance and requires that the records of LaMATS remain confidential.

OCCUPATIONAL LICENSE TAX/INTEREST RATE CHANGES: In Act 788, the Legislature decreased the interest rate charged by the state on unpaid taxes. Although the Act does not take effect until 2006, it is advisable to check your Occupational License Tax Ordinance at this time to determine if it makes reference to L. R. S. 47:1601 to set the rate of interest on unpaid taxes. If it does, and you do not want your interest rate to decrease (currently, the rate is 15 percent per year, or one and one-quarter percent per month), you use the enclosed model ordinance which specifically lists the rate of interest to update your ordinance.

ADOPTION PROCEDURE: Both of the ordinances included with this bulletin enact the new language and repeal your old ordinance, and are designed to be ready for adoption once properly prepared. Please use these as a reference only, and consult your city attorney to determine the proper language needed for your municipality.

Also, please do not adopt Section 5 of the Insurance Premium Tax Ordinance unless you are currently under contract with LaMATS for collection of that tax. If you wish to contract with LaMATS you may adopt Section 5 and call LaMATS to request a copy of the collection contract.

Please call if you have questions or need additional information. Both LaMATS and the LMA can be reached at 225-344-5001 or 800-234-8274.

Use the links below to access the PDF versions of these files. (You need Adobe Acrobat Reader; if you don't have it, download it from Adobe.com or call the LMA office for copies of the ordinances.)