(a)Each captive insurance company shall pay to the commissioner, by March 1 of each year, a tax at the rate of four-tenths of one percent on the first 20 million dollars, three-tenths of one percent on the next 20 million dollars, two-tenths of one percent on the next 20 million dollars, seventy-five thousandths of one percent on each dollar thereafter on the direct premiums collected or contracted for on policies or contracts of insurance written by the captive insurance company during the year ending December 31 next preceding, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums which shall include dividends on unabsorbed premiums or premium deposits returned or credited to policyholders. Notwithstanding the foregoing, no tax
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(a) Each captive insurance company shall pay to the commissioner, by March 1 of each year, a tax at the rate of four-tenths of one percent on the first 20 million dollars, three-tenths of one percent on the next 20 million dollars, two-tenths of one percent on the next 20 million dollars, seventy-five thousandths of one percent on each dollar thereafter on the direct premiums collected or contracted for on policies or contracts of insurance written by the captive insurance company during the year ending December 31 next preceding, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums which shall include dividends on unabsorbed premiums or premium deposits returned or credited to policyholders. Notwithstanding the foregoing, no tax shall be due or payable as to considerations received for annuity contracts.
(b) Each captive insurance company shall pay to the commissioner by March 1 of each year a tax at the rate of two hundred and twenty-five thousandths of one percent on the first 20 million dollars of assumed reinsurance premium, one hundred fifty thousandths of one percent on the next 20 million dollars, fifty thousandths of one percent on the next 20 million dollars, twenty-five thousandths of one percent of each dollar thereafter. However, no reinsurance tax applies to premiums for risks or portions of risks which are subject to taxation on a direct basis pursuant to subsection (a). No reinsurance premium tax shall be payable in connection with the receipt of assets in exchange for the assumption of loss reserves and other liabilities of another insurer under common ownership and control if the transaction is part of a plan to discontinue the operations of the other insurer, and if the intent of the parties to the transaction is to renew or maintain business with the captive insurance company.
(c) If the aggregate taxes to be paid by a captive insurance company calculated under subsections (a) and (b) amount to less than five thousand dollars ($5,000) in any year, the captive insurance company shall pay a tax of five thousand dollars ($5,000) for that year. The aggregate taxes paid by a captive insurance company may not exceed one hundred thousand dollars ($100,000) in any year.
(d) The minimum tax for a protected cell captive insurance company may not be less than five thousand dollars ($5,000) and shall apply to the protected cell captive insurance company as a whole and not to each protected cell. The maximum tax to be paid by a protected cell captive insurance company shall be the aggregate of the tax liabilities of each protected cell. The maximum tax liability attributed to any one protected cell captive insurance company shall be one hundred thousand dollars ($100,000).
(e) Examination expenses paid in accordance with Section 27-31B-10 and business privilege taxes paid in accordance with Section 40-14A-22 by a captive insurance company shall be allowed as credits to the tax provided for in this section for the calendar year in which they were paid. In the event application of the credit results in a negative tax due, the tax due shall be zero and any unused portion of the credit may not be carried forward for use in subsequent years.
(f) A captive insurance company failing to make returns as required by Chapter 14A of Title 40 or failing to pay within the time required all taxes assessed by this section, shall be subject to Section 27-4A-4.
(g) Two or more captive insurance companies under common ownership and control shall be taxed as though they were a single captive insurance company.
(h) For the purposes of this section, “common ownership and control” shall have the following meaning, as applicable:
(1) In the case of stock corporations, the direct or indirect ownership of 80 percent or more of the outstanding voting stock of two or more corporations by the same shareholder or shareholders.
(2) In the case of mutual corporations, the direct or indirect ownership of 80 percent or more of the surplus and the voting power of two or more corporations by the same member or members.
(i) In the case of a branch captive insurance company, the tax provided for in this section shall apply only to the branch business of the company.
(j) If a captive insurance company has been licensed for less than a full calendar year and has written premiums the tax for which is less than the minimum set forth in this section, the tax due shall be prorated as follows:
(1) If licensed on or before March 31, 100 percent.
(2) If licensed April 1 to June 30, 75 percent.
(3) If licensed July 1 to September 30, 50 percent.
(4) If licensed October 1 to December 31, 25 percent.
(k) If a captive insurance company surrenders its license and the calculated tax on premiums written during the calendar year is less than the minimum set forth in this section, the tax due shall be prorated as follows:
(1) If surrendered on or before March 31, 25 percent.
(2) If surrendered April 1 to June 30, 50 percent.
(3) If surrendered July 1 to September 30, 75 percent.
(4) If surrendered October 1 to December 31, 100 percent.
(l) The tax provided for in this section shall constitute all taxes collectible under the laws of this state from any captive insurance company, and no other occupation tax or other taxes shall be levied or collected from any captive insurance company by the state or any county, city, or municipality within this state, except business privilege taxes and ad valorem taxes on real and personal property used in the production of income.
(m) The tax provided for in this section shall not be applicable if the captive insurance company writes no premiums during the calendar year.