Opinion
FEBRUARY 23, 1996
SYLLABUS
63-A: Licensing: For Tax 54: Insurance R.S. 22:1068 R.S. 22:1076
Certificates of deposits or cash deposited in Louisiana banks or savings and loans cannot be considered in calculating the tax reduction against amounts payable to municipal and parochial corporations pursuant to R.S. 22:1076, even though such items are considered in the calculation of the state license tax reduction.
Mr. Barry W. Karns Deputy General Counsel Department of Insurance Post Office Box 94214 Baton Rouge, Louisiana 70804-9214
You have requested the opinion of this office regarding the tax reduction provided to insurers paying license taxes to municipal or parochial corporations in accordance with R.S. 22:1076. The reduction is provided for at R.S. 22:1076(B)(2), and applies to taxpaying insurers who invest one-sixth of their "total admitted assets"' in certain statutorily specified investments.
As you point out, R.S. 22:1068 provides for a similar reduction in the license tax payable by insurers to thestate. However, the investments which qualify for a reduction in the license tax payable to the state differ from the investments which qualify for a reduction in the license tax payable to a municipal or parochial corporation.
Your correspondence notes that R.S. 22:1068(C), applicable to state license taxes, includes certificates of deposit (see paragraph (a)) and cash on deposit in banks or savings and loan associations domiciled in Louisiana (see paragraph (g)). These two investments are not included in R.S. 22:1076(B)(2), which is applicable to municipal and parochial license taxes. Therefore, you ask our opinion as to whether or not certificates of deposit or cash deposited in Louisiana banks or savings and loans should be allowed to be considered in calculating the credit against amounts payable to municipal and parochial corporations pursuant to R.S. 22:1076.
As a general rule, exemptions from taxes are to be strictly construed against the person claiming the exemption, and any plausible doubt is fatal. Since an exemption is an exceptional privilege, it must be clearly, unequivocally and affirmatively established. Mattingly v. Vial , 190 So.2d 601 (La. 1939) Cajun Electric Power Co-op., Inc. v. McNamara, 452 So.2d 212 (La.App. 1st Cir. 1984); Ethyl Corporation v. Collector of Revenue , 351 So.2d 1290 (La.App. 1st Cir. 1977). When relief from a tax burden is sought, no distinction is made between exemptions, deductions or credits. Ethyl Corporation, supra. [See also Kentucky Utilities Company v. Glenn , 394 F.2d 631 (CA 6 1968, overruled on other grounds at 733 F.2d 399), cited in Ethyl Corporation, supra. ]
In our opinion, a tax reduction such as the one provided for in R.S. 22:1076(B)(2) is in the nature of a tax exemption, deduction or credit, and should be treated as such. The tax reduction in question must therefore be strictly construed.
Accordingly, it is the opinion of this office that certificates of deposit or cash deposited in Louisiana banks or savings and loans cannot be considered in calculating the tax reduction against amounts payable to municipal and parochial corporations pursuant to R.S. 22:1076, even though such items are considered in the calculation of the state license tax reduction.
We trust the foregoing to be of assistance.
Yours very truly,
RICHARD P. IEYOUB Attorney General
By: JEANNE-MARIE ZERINGUE BARHAM Assistant Attorney General
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