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 seventy of the insurance law, other than the metropolitan

transportation authority, the power authority of New York or any

statutory subsidiary thereof, the New York convention center operating

corporation 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 section

seven thousand five 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.

(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 section seven thousand two of the

insurance law. 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 seven

thousand six 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.