State Premium Taxes
Some states impose a "Premium Tax" which is levied on the Purchase Amount ("Premium") of the immediate annuity. Whether or not the tax is levied is usually determined according to the state of residence written in the annuity application. Companies deduct these taxes from the premium at the time the immediate annuity is purchased. Taxes are not imposed if an annuitant purchases an annuity in a non-premium tax state and then moves his residence to a premium-tax state. The taxes collected by the insurance companies is paid directly to the states. Some states levy different tax rates depending on whether the source of funds used to purchase the annuity is before-tax ("qualified") monies or after-tax ("non-qualified") funds. If you have questions about premium taxes call our customer service desk at 800-872-6684.

Premium Taxes Rates as of Jan. 1, 2000

State

Qualified
Funds
Non-Qualified
Funds
California - CA 0.50% 2.35%
District of Columbia - DC* 2.25% 2.25%
Kentucky - KY* 2.00% 2.00%
Maine - ME 0.00% 2.00%
Nevada - NV 0.00% 3.50%
South Dakota - SD 0.00% 1.25%
West Virginia - WV 1.00% 1.00%
Wyoming - WY 0.00% 1.00%

* Company specific