By Charles Capouet and Andrew Appleby

The Florida Department of Revenue determined that a reinsurer did not have nexus with Florida for corporate income tax purposes.  The Department first asserted that an insurer or reinsurer would have nexus with Florida if it was authorized to transact business in the state.  The Department also stated that nexus would exist if an approved reinsurer reinsured policies from an insurer domiciled in Florida.  In this case, the reinsurer did not have nexus with Florida because: (1) it was not an approved reinsurer and was not registered with the Florida Office of Insurance Regulation; and (2) the ceding companies were not domiciled in Florida.  The Department also addressed an insurance company’s apportionment factor, which depends on whether the ceding insurance companies are resident, or have a regional home office, in Florida.  Fla. Technical Assistance Advisement No. 17C1-001, Fla. Dep’t of Rev., Jan. 13, 2017.