33-28-201. Tax on premiums collected. (1) (a) Each captive insurance company shall pay to the commissioner, on or before March 1 of each year, a tax on the direct premiums collected or contracted for on policies or contracts of insurance written by the captive insurance company in this state during the year ending December 31, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums, including dividends on unabsorbed premiums or premium deposits returned or credited to policyholders.
     (b) The tax on direct premiums collected in this state must be calculated as follows:
     (i) 0.4% on the first 20 million dollars;
     (ii) 0.3% on the next 20 million dollars;
     (iii) 0.2% on the next 20 million dollars; and
     (iv) 0.075% on each subsequent dollar collected.
     (2) (a) Each captive insurance company shall pay to the commissioner on or before March 1 of each year a tax on assumed reinsurance premiums.
     (b) A reinsurance tax does not apply to premiums for risks or portions of risks that are subject to taxation on a direct basis pursuant to subsection (1).
     (c) A reinsurance premium tax is not payable in connection with the receipt of assets in exchange for the assumption of loss reserves and other liabilities of another insurer under common ownership and control if the transaction is part of a plan to discontinue the operations of the other insurer and if the intent of the parties to the transaction is to renew or maintain the business with the captive insurance company.
     (d) The amount of the reinsurance tax must be calculated as follows:
     (i) 0.225% on the first 20 million dollars of assumed reinsurance premiums;
     (ii) 0.150% on the next 20 million dollars of assumed reinsurance premiums; and
     (iii) 0.050% on each subsequent dollar of assumed reinsurance premiums.
     (3) If the aggregate taxes to be paid by a captive insurance company calculated under subsections (1) and (2) amount to less than $5,000 in any year, the captive insurance company shall pay a tax of $5,000 for that year.
     (4) Two or more captive insurance companies under common ownership and control must be taxed as though they were a single captive insurance company.
     (5) For the purposes of this section, "common ownership and control" means:
     (a) in the case of stock corporations, the direct or indirect ownership of 80% or more of the outstanding voting stock of two or more corporations by the same shareholder or shareholders; and
     (b) in the case of mutual corporations, the direct or indirect ownership of 80% or more of the surplus and the voting power of two or more corporations by the same member or members.

     History: En. Sec. 10, Ch. 298, L. 2001.