Watch for Change at the State House: New State Taxes on Life Company Commercial Mortgage Loans & Servicing
In several earlier postings, I've warned of changes at the court house, and at state legislatures and state regulatory\administrative agencies.
Today, the Mortgage Bankers Assn circulated an e-mail relating to current legislation in South Dakota for a new business tax "on interest and servicing income of life companies for loans made on commercial properties, similarly to what it charged for banks."
The announcement explained that in response to the legislation, the American Council of Life Insurers argued "that life companies are lending to meet the actuarial needs of policy holders and that their income is already taxed under a different regime (gross policy receipts tax) and taxing the commercial real estate lending activity of life companies would constitute double taxation for life companies."
The announcement goes on to state that "South Dakota is doing this primarily to raise revenue and to allay banking industry arguments that life companies have a competitive advantage by not having to pay business taxes on net income. The South Dakota legislature is anticipated to take action on this legislation on Tuesday, March 3. Despite frenzied lobbying efforts last week, unfortunately, we are not optimistic that this legislation can be stopped because it has been strongly supported by the Governor. If this is of concern to your organization, we would urge your government affairs team to weigh-in on this issue with their contacts in the South Dakota’s legislature and Governor’s office."
This one is worth watching: what state will NOT be looking for new ways to raise money?
- anything like this in your state house?
A friend of mine several years ago told me that "change is our friend."
I think we'll all agree that in the foreseeable future, "change will be expensive."
Please post a comment or identify any other trends of interest to commercial lenders.
