Some types of insurance companies are not subject to taxation under either chapter. The corporate franchise tax applies to domestic fire and casualty insurers and the nonlife business of domestic life insurers. For example, the Wisconsin taxation of a New York company doing business in Wisconsin is dependent on the New York taxation of a Wisconsin company doing business in New York. Thus, non-U.S. insurers are taxed at the Wisconsin statutory rate. For the premium tax, the base is gross premiums received for direct insurance less return premiums and cancellations and policyholder dividends from savings and gains on direct insurance in Wisconsin.
Direct insurance includes all insurance other than reinsurance.
Under reinsurance, an insurer shares the risk and premiums with other insurers. Fire department dues are distributed to local units of government, while other insurance company taxes are part of the state general fund. Town mutual insurance companies organized under or subject to Chapter 612 of the Wisconsin Statutes are not subject to taxation or license fees under Chapter 76, Wis. Stats. A town mutual insurance corporation may be organized by at least 100 adults, each of whom has a separate insurable risk within a prescribed territory. A town mutual may insure members against loss or damage from any cause to any property in which a member has an interest, including insurance against loss of use or loss of income from property.