2023 New York Laws › ISC - Insurance › Article 91 - Taxes and Fees › 9111-A - Temporary Franchise Tax on Certain Insurance Companies.

* §  9111-a.  Temporary  franchise tax on certain insurance companies.
(a) Imposition. (1) For the privilege of  conducting  business  in  this
state  and  in  addition  to  any  other  requirements  therefor,  every
insurance company subject to the franchise tax  imposed  by  subdivision
(a)  of section fifteen hundred ten of the tax law, other than insurance
companies whose  premiums  are  received  solely  as  consideration  for
accident and health insurance policies, shall pay a franchise tax of two
percent  of  all  gross  direct  premiums, less return premiums thereon,
written during the  "event  year",  as  such  term  is  defined  in  the
following  sentence, on risks located or residing in this state. For the
purposes of this section, "event year" shall mean (A) the calendar  year
preceding  the  February  fifth  on  which  the budget director fails to
provide a certification to the superintendent that the transfers to  the
general  fund  that  have  been authorized by section five thousand five
hundred sixteen-e of this chapter have been made  or  (B)  the  calendar
year  preceding  the  year  in  which  a  final  judicial  determination
invalidating some or all of the provisions of such section five thousand
five hundred sixteen-e requires a return from the general fund of any or
all of the amounts transferred to such fund  pursuant  to  such  section
five thousand five hundred sixteen-e.
(2)  Determination of direct premiums-general provisions. (A) The term
"premium" includes all amounts received as consideration  for  insurance
contracts  or  reinsurance  contracts, other than for annuity contracts,
and shall include premium deposits, assessments, policy fees, membership
fees, and every other compensation for such  contract.  In  ascertaining
the  amount  of  direct  premiums upon which a tax is payable under this
section there shall be  first  determined  the  amount  of  total  gross
premiums or deposit premiums or assessments, less return thereon, on all
policies,   certificates,  renewals,  policies  subsequently  cancelled,
insurance and reinsurance executed, issued or delivered on  property  or
risks  located  or  resident  in  this  state,  including  premiums  for
reinsurance assumed, and also including premiums  written,  procured  or
received  in  this  state  on  business  which  cannot  specifically  be
allocated or apportioned and reported as taxable premiums or which  have
been  used  as  a  measure  of  a  tax on business of any other state or
states. Provided, however, in the case of special risk premiums,  direct
premiums shall include only those premiums written, procured or received
in  this  state  on property or risks located or resident in this state.
The reporting of premiums for the purpose of the  tax  imposed  by  this
section  shall  be  on a written basis or on a paid-for basis consistent
with  the  basis  required  by  the  annual  statement  filed  with  the
superintendent  of  financial services pursuant to section three hundred
seven of this chapter.
(B) The term "gross direct premiums," as used in this  section,  shall
not  include  premiums  for  policies  issued  pursuant  to section four
thousand two  hundred  thirty-six  of  this  chapter  and  premiums  for
insurance  upon hulls, freights, or disbursements, or upon goods, wares,
merchandise and all other personal property and  interests  therein,  in
the  course  of  exportation  from,  importation  into  any  county,  or
transportation coastwide, including transportation by land or water from
point of origin to final destination in respect to, appertaining to,  or
in  connection  with, any and all risks or perils of navigation, transit
or transportation, and while being  prepared  for,  and  while  awaiting
shipment  and  during  any  delays, storage, transshipment or reshipment
incident thereto, including war risks and marine builder's risks.
(C) After determining the amount of total gross premiums, less returns
thereon, as hereinbefore provided, there shall be deducted the following
items:
(i) Such premiums, less  return  premiums  thereon,  which  have  been
received  by  way  of  reinsurance  from  corporations or other insurers
authorized to transact business in this state;
(ii) Dividends on such direct business, including unused or unabsorbed
portions  of premium deposits paid or credited to policyholders, but not
including deferred dividends paid in cash to policyholders  on  maturing
policies, nor cash surrender values.
(D)  In  determining  the  amount  of  direct premiums taxable in this
state, all such premiums written, procured or  received  in  this  state
shall be deemed written on property or risks located or resident in this
state  except such premiums as are properly allocated or apportioned and
reported as taxable premiums or which have been used as a measure  of  a
tax  of  any  other  state  or states, provided, however, in the case of
special risk premiums, direct premiums shall include only those premiums
written, procured or received in this state on property or risks located
or resident in this state.
(b) Payment. Taxes due  under  this  section  shall  be  paid  to  the
superintendent in such manner as the superintendent shall prescribe. The
tax  shall  be  paid in two installments. The first installment shall be
due  within  thirty  days  of  the  time  at  which  the  superintendent
determines  such  tax  is  to  be  paid and shall be no less than ninety
percent of the tax ultimately determined to be due under  this  section.
The  balance  of  any tax due shall be paid on the next succeeding March
twenty-fifth.
(c) Returns and reports.  A  return,  in  a  form  prescribed  by  the
superintendent,  shall accompany the tax payment due March twenty-fifth.
In addition, the superintendent may prescribe a return to accompany  the
first installment.
(d)  Interest and penalties. (1) Interest. If any amount of tax is not
paid on or before the date prescribed for payment thereof  in  paragraph
two  of  this  subsection,  interest  on  such  amount  of  tax  at  the
underpayment rate set  by  the  commissioner  of  taxation  and  finance
pursuant  to  section  one  thousand ninety-six of the tax law, plus one
percentage point, shall be paid to the  superintendent  for  the  period
from the date prescribed for payment until the date paid.
(2)  Underpayment  penalty.  If  the  amount  of  tax  paid  by  March
twenty-fifth is less than ninety-five  percent  of  the  tax  ultimately
determined  to  be  due  pursuant  to  this section, a penalty is hereby
imposed equal to one hundred  percent  of  the  difference  between  the
amount  of  tax  actually  paid  and  ninety-five  percent  of  the  tax
ultimately determined to be due. In addition, this  penalty  shall  bear
interest  at  the rate set forth in paragraph one of this subsection for
the period from the due date until the date the penalty is paid.
(e) Coordination with other laws. Notwithstanding  the  provisions  of
section  one  thousand  one  hundred  twelve of this chapter, taxes paid
pursuant to this section shall not be considered in the  calculation  of
reciprocal  taxes  due  this  state pursuant to section one thousand one
hundred twelve  of  this  chapter.  Notwithstanding  the  provisions  of
subdivision  (c) of section fifteen hundred eleven of the tax law, taxes
paid to other states on account of the imposition of the tax imposed  by
this  section shall not be included in the calculation of the tax credit
provided for by subdivision (c) of section fifteen hundred eleven of the
tax law.
* NB Section null and void if schedule is submitted as provided for in
§ 5516-e of the insurance law.