Out-Of-State Reinsurers Subject to Indiana Corporate Income Tax, Court Rules

INDIANAPOLIS — State laws governing premiums tax on out-of-state reinsurers are immune from Commerce Clause challenges under the McCarran Ferguson Act, the Indiana Tax Court has ruled, holding that UPINSCO Inc. and UPS Re Ltd. are not exempt from Indiana's corporate income tax.

On Sept. 16, Senior Judge Thomas Fisher further found that foreign reinsurers must be physically present in Indiana to satisfy the statutory requirement of "doing business" under Indiana Code § 27-1-18-2, therefore their income is not exempt from Indiana’s corporate income tax.

UPS and its affiliates, which include the foreign reinsurance companies of UPINSCO Inc. and UPS …