§ 27-43-9 - Tax on premiums collected.
SECTION 27-43-9
§ 27-43-9 Tax on premiums collected.– (a) Each captive insurance company shall pay to the division of taxation, on orbefore the first day of March of each year, a tax at the rate of two tenths ofone percent (0.2%) on the first twenty million dollars ($20,000,000), andfifteen one hundredths of one percent (0.15%) on the next twenty milliondollars ($20,000,000), and one tenth of one percent (0.1%) on the next twentymillion dollars ($20,000,000), and thirty-seven and one-half thousandths of onepercent (0.0375%) on each dollar thereafter on the direct premiums collected orcontracted for on policies or contracts of insurance written by the captiveinsurance company during the year ending December 31 next preceding, afterdeducting from the direct premiums subject to the tax the amounts paid topolicyholders as return premiums which shall include dividends on unabsorbedpremiums or premium deposits returned or credited to policyholders.
(b) Each captive insurance company shall pay to the divisionof taxation on or before the first day of March of each year a tax at the rateof one hundred and twelve and one-half thousandths of one percent (0.1125%) onthe first twenty million dollars ($20,000,000) of assumed reinsurance premium,and seventy-five thousandths of one percent (0.075%) on the next twenty milliondollars ($20,000,000), and twenty-five thousandths of one percent (0.025%) onthe next twenty million dollars ($20,000,000), and twelve and one-halfthousandths of one percent (0.0125%) of each dollar thereafter. No reinsurancetax applies to premiums for risks or portions of risks which are subject totaxation on a direct basis pursuant to subsection (a) of this section. Noreinsurance premium tax is payable in connection with the receipt of assets inexchange for the assumption of loss reserves and other liabilities of anotherinsurer under common ownership and control if this transaction is part of aplan to discontinue the operations of the other insurer, and if the intent ofthe parties to this transaction is to renew or maintain this business with thecaptive insurance company.
(c) If the aggregate taxes to be paid by a captive insurancecompany calculated under subsections (a) and (b) of this section amount to lessthan twenty-five hundred dollars ($2,500) in any year, this captive insurancecompany pays a tax of twenty-five hundred dollars ($2,500) for this year.
(d) Two (2) or more captive insurance companies under commonownership and control are taxed as though they were a single captive insurancecompany.
(e) For the purposes of this section, common ownership andcontrol means:
(1) In the case of stock corporations, the direct or indirectownership of eighty percent (80%) or more of the outstanding voting stock oftwo (2) or more corporations by the same shareholder or shareholders; and
(2) In the case of mutual corporations, the direct orindirect ownership of eighty percent (80%) or more of the surplus and thevoting power of two (2) or more corporations by the same member or members.
(f) A captive insurance company is not subject to the grosspremium tax imposed under chapter 17 of title 44.