N.Y. Tax Law 1502-B – Computation of tax for captive insurance companies
§ 1502-b. Computation of tax for captive insurance companies. (a) In lieu of the taxes and tax surcharge imposed by sections fifteen hundred one, fifteen hundred two-a, fifteen hundred five-a, and fifteen hundred ten of this article, every captive insurance company licensed by the superintendent of financial services pursuant to the provisions of Article 70 of the insurance law, other than the metropolitan transportation authority, the power authority of New York or any statutory subsidiary thereof, and a public benefit corporation or not-for-profit corporation formed by a city with a population of one million or more pursuant to subsection (a) of § 7005 of the insurance law, each of which is expressly exempt from the payment of fees, taxes or assessments whether state or local, and other than combinable captive insurance company, shall, for the privilege of exercising its corporate franchise, pay a tax on (1) all gross direct premiums, less return premiums thereon, written on risks located or resident in this state and (2) all assumed reinsurance premiums, less return premiums thereon, written on risks located or resident in this state. The rate of the tax imposed on gross direct premiums shall be four-tenths of one percent on all or any part of the first twenty million dollars of premiums, three-tenths of one percent on all or any part of the second twenty million dollars of premiums, two-tenths of one percent on all or any part of the third twenty million dollars of premiums, and seventy-five thousandths of one percent on each dollar of premiums thereafter. The rate of the tax on assumed reinsurance premiums shall be two hundred twenty-five thousandths of one percent on all or any part of the first twenty million dollars of premiums, one hundred and fifty thousandths of one percent on all or any part of the second twenty million dollars of premiums, fifty thousandths of one percent on all or any part of the third twenty million dollars of premiums and twenty-five thousandths of one percent on each dollar of premiums thereafter. The tax imposed by this section shall be equal to the greater of (i) the sum of the tax imposed on gross direct premiums and the tax imposed on assumed reinsurance premiums or (ii) five thousand dollars.
Terms Used In N.Y. Tax Law 1502-B
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- subsidiary: means a corporation of which over fifty percent of the number of shares of stock entitling the holders thereof to vote for the election of directors or trustees is owned by the taxpayer. See N.Y. Tax Law 1500
(b) In determining the amount of gross direct premiums or assumed reinsurance premiums taxable in this state, all 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.
(c) The definition of the term "premium" set forth in subdivision (c) of section fifteen hundred ten of this article shall apply to this section. In addition, "gross direct premium" shall be determined as provided in such subdivision (c). Provided, however, that the term "premium" shall also include any amount received by a captive insurance company as consideration for insurance provided, in the case of a pure captive insurance company, to its parents and affiliated companies, and, in the case of a group captive insurance company, to the industrial insureds that comprise the industrial insured group. The terms "pure captive insurance company", "group captive insurance company", "industrial insureds" and "industrial insured group" shall have the same meanings as such terms have in § 7002 of the insurance law. The reporting of premiums for the purpose of the tax imposed by this § of the insurance law.
(d) The superintendent of financial services shall have the same power, duty and responsibility to examine the returns of captive insurance companies as such superintendent has with respect to insurance corporations as set forth in subdivision (e) of section fifteen hundred ten of this article.
(e) The credits set forth in section fifteen hundred eleven of this article shall not be allowed against the tax imposed by this section.