Insurance companies owe the state nearly $65 million in taxes. That’s according to an audit of premium taxes paid by insurance companies to New Mexico over more than a decade. The audit looked at 30 health, life and property insurers’ tax payments from from 2003 to 2016. Of those, 17 companies underpaid the taxes, with one insurer underpaying by nearly $30 million. Most of the underpaid money came because companies misapplied or claimed tax credits for which they did not actually qualify.
Three state agencies expressed a lack of confidence Thursday in the Office of the Superintendent of Insurance’s (OSI) ability to collect millions of dollars back taxes owed to the state from health insurance companies. State Auditor Tim Keller, Department of Finance and Administration State Budget Division Director A.J. Forte and Legislative Finance Committee Deputy Director Charles Sallee all expressed doubts in OSI’s plans to collect an estimated $193 million that it failed to collect from premium health insurance taxes from 2010 through 2015. The comments came at an interim Legislative Finance Committee hearing. “I think it’s very notable there are three oversight agencies looking at this,” Forte told state lawmakers. “There are too many inconsistencies for me to feel comfortable in this process.”
The controversy began when Keller’s office revealed the uncollected revenue in a special audit earlier this year.
The state failed to collect nearly $200 million in taxes from health insurance companies during a recent five-year period, according to a report released Tuesday by State Auditor Tim Keller. The state Office of the Superintendent of Insurance (OSI) should have collected more than $193 million between April 2010 and April 2015, according to the report. OSI’s purpose is to collect premium taxes from insurers who do business in New Mexico. In the report, Keller noted that the $193 million total is based on a sample representing 26 percent of all premium taxes collected during the time period. In other words, OSI may have failed to collect more than that estimate.