LIC-4.02 - Exemption for Insurance Producers - for tax years beginning on or before 12/31/2022

Note: This rule sunsets 12/31/2022 and does not apply to tax years beginning on or after 1/1/2023. See LIC 4.06 for later tax years.

Insurance producers are exempt from filing returns under the Business License and the Business Income Tax laws only when the producer's gross income arises solely from premiums or fees for insurance policies, including all premiums, assessments, dues and fees received or derived. The insurance producer loses this filing exemption if the producer has gross income from any other business activity subject to the Business License or Business Income Tax laws. The gross income from insurance policies and fees remains exempt throughout the apportionment calculation.

Example: Marilyn Johnson, an insurance producer, has gross income from insurance activities of $ 60,000 a year and generates $40,000 in fees as a financial counselor. All the activities are managed and performed from her business location within the County. Ms. Johnson is required to file returns with the County and will report the net income (loss) earned from her agency activities as well as the financial counseling activities. The total business net income (loss) will be multiplied by the apportionment factor of 40% for the County ($40,000 / $100,000). The gross income from insurance activities is exempt and is not included in the numerator of the apportionment formula, even though it was derived from business activity performed in the County.

REFERENCES

Portland City Code Section 7.02.400 B.
Multnomah County Code Section 12.400 B.
Oregon Revised Statutes Sections 731.840 (4) (a) and (b).