§ 9111-A — Temporary franchise tax on certain insurance companies

New York § 9111-A

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 91: Taxes and Fees

Text

* § 9111-a. Temporary franchise tax on certain insurance companies.\n(a) Imposition. (1) For the privilege of conducting business in this\nstate and in addition to any other requirements therefor, every\ninsurance company subject to the franchise tax imposed by subdivision\n(a) of section fifteen hundred ten of the tax law, other than insurance\ncompanies whose premiums are received solely as consideration for\naccident and health insurance policies, shall pay a franchise tax of two\npercent of all gross direct premiums, less return premiums thereon,\nwritten during the "event year", as such term is defined in the\nfollowing sentence, on risks located or residing in this state. For the\npurposes of this section, "event year" shall mean (A) the calendar year\npreceding the February fifth on which the budget director fails to\nprovide a certification to the superintendent that the transfers to the\ngeneral fund that have been authorized by section five thousand five\nhundred sixteen-e of this chapter have been made or (B) the calendar\nyear preceding the year in which a final judicial determination\ninvalidating some or all of the provisions of such section five thousand\nfive hundred sixteen-e requires a return from the general fund of any or\nall of the amounts transferred to such fund pursuant to such section\nfive thousand five hundred sixteen-e.\n (2) Determination of direct premiums-general provisions. (A) The term\n"premium" includes all amounts received as consideration for insurance\ncontracts or reinsurance contracts, other than for annuity contracts,\nand shall include premium deposits, assessments, policy fees, membership\nfees, and every other compensation for such contract. In ascertaining\nthe amount of direct premiums upon which a tax is payable under this\nsection there shall be first determined the amount of total gross\npremiums or deposit premiums or assessments, less return thereon, on all\npolicies, certificates, renewals, policies subsequently cancelled,\ninsurance and reinsurance executed, issued or delivered on property or\nrisks located or resident in this state, including premiums for\nreinsurance assumed, and also including premiums written, procured or\nreceived in this state on business which cannot specifically be\nallocated or apportioned and reported as taxable premiums or which have\nbeen used as a measure of a tax on business of any other state or\nstates. Provided, however, in the case of special risk premiums, direct\npremiums shall include only those premiums written, procured or received\nin this state on property or risks located or resident in this state.\nThe reporting of premiums for the purpose of the tax imposed by this\nsection shall be on a written basis or on a paid-for basis consistent\nwith the basis required by the annual statement filed with the\nsuperintendent of financial services pursuant to section three hundred\nseven of this chapter.\n (B) The term "gross direct premiums," as used in this section, shall\nnot include premiums for policies issued pursuant to section four\nthousand two hundred thirty-six of this chapter and premiums for\ninsurance upon hulls, freights, or disbursements, or upon goods, wares,\nmerchandise and all other personal property and interests therein, in\nthe course of exportation from, importation into any county, or\ntransportation coastwide, including transportation by land or water from\npoint of origin to final destination in respect to, appertaining to, or\nin connection with, any and all risks or perils of navigation, transit\nor transportation, and while being prepared for, and while awaiting\nshipment and during any delays, storage, transshipment or reshipment\nincident thereto, including war risks and marine builder's risks.\n (C) After determining the amount of total gross premiums, less returns\nthereon, as hereinbefore provided, there shall be deducted the following\nitems:\n (i) Such premiums, less return premiums thereon, which have been\nreceived by way of reinsurance from corporations or other insurers\nauthorized to transact business in this state;\n (ii) Dividends on such direct business, including unused or unabsorbed\nportions of premium deposits paid or credited to policyholders, but not\nincluding deferred dividends paid in cash to policyholders on maturing\npolicies, nor cash surrender values.\n (D) In determining the amount of direct premiums taxable in this\nstate, all such premiums written, procured or received in this state\nshall be deemed written on property or risks located or resident in this\nstate except such premiums as are properly allocated or apportioned and\nreported as taxable premiums or which have been used as a measure of a\ntax of any other state or states, provided, however, in the case of\nspecial risk premiums, direct premiums shall include only those premiums\nwritten, procured or received in this state on property or risks located\nor resident in this state.\n (b) Payment. Taxes due under this section shall be paid to the\nsuperintendent in such manner as the superintendent shall prescribe. The\ntax shall be paid in two installments. The first installment shall be\ndue within thirty days of the time at which the superintendent\ndetermines such tax is to be paid and shall be no less than ninety\npercent of the tax ultimately determined to be due under this section.\nThe balance of any tax due shall be paid on the next succeeding March\ntwenty-fifth.\n (c) Returns and reports. A return, in a form prescribed by the\nsuperintendent, shall accompany the tax payment due March twenty-fifth.\nIn addition, the superintendent may prescribe a return to accompany the\nfirst installment.\n (d) Interest and penalties. (1) Interest. If any amount of tax is not\npaid on or before the date prescribed for payment thereof in paragraph\ntwo of this subsection, interest on such amount of tax at the\nunderpayment rate set by the commissioner of taxation and finance\npursuant to section one thousand ninety-six of the tax law, plus one\npercentage point, shall be paid to the superintendent for the period\nfrom the date prescribed for payment until the date paid.\n (2) Underpayment penalty. If the amount of tax paid by March\ntwenty-fifth is less than ninety-five percent of the tax ultimately\ndetermined to be due pursuant to this section, a penalty is hereby\nimposed equal to one hundred percent of the difference between the\namount of tax actually paid and ninety-five percent of the tax\nultimately determined to be due. In addition, this penalty shall bear\ninterest at the rate set forth in paragraph one of this subsection for\nthe period from the due date until the date the penalty is paid.\n (e) Coordination with other laws. Notwithstanding the provisions of\nsection one thousand one hundred twelve of this chapter, taxes paid\npursuant to this section shall not be considered in the calculation of\nreciprocal taxes due this state pursuant to section one thousand one\nhundred twelve of this chapter. Notwithstanding the provisions of\nsubdivision (c) of section fifteen hundred eleven of the tax law, taxes\npaid to other states on account of the imposition of the tax imposed by\nthis section shall not be included in the calculation of the tax credit\nprovided for by subdivision (c) of section fifteen hundred eleven of the\ntax law.\n * NB Section null and void if schedule is submitted as provided for in\n§ 5516-e of the insurance law.\n