Vermont § 6014 - Tax on premiums collected

§ 6014. Tax on premiums collected

• (a) Each captive insurance company shall pay to the Commissioner of Taxes on or before
  March 15 of each year a tax at the rate of 38-hundredths of one percent on the first
  20 million dollars and 285-thousandths of one percent on the next 20 million dollars
  and 19-hundredths of one percent on the next 20 million dollars and 72-thousandths
  of one percent on each dollar thereafter on the direct premiums collected or contracted
  for on policies or contracts of insurance written by the captive insurance company
  during the year ending December 31 next preceding, after deducting from the direct
  premiums subject to the tax the amounts paid to policyholders as return premiums which
  shall include dividends on unabsorbed premiums or premium deposits returned or credited
  to policyholders; provided, however, that no tax shall be due or payable as to considerations
  received for annuity contracts. (b) Each captive insurance company shall pay to the Commissioner of Taxes on or before
  March 15 of each year a tax at the rate of 214-thousandths of one percent on the first
  20 million dollars of assumed reinsurance premium, and 143-thousandths of one percent
  on the next 20 million dollars and 48-thousandths of one percent on the next 20 million
  dollars and 24-thousandths of one percent on each dollar thereafter. However, no reinsurance
  tax applies to premiums for risks or portions of risks that are subject to taxation
  on a direct basis pursuant to subsection (a) of this section. No reinsurance premium
  tax shall be 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 such transaction is part of a plan to discontinue the operations
  of such other insurer, and if the intent of the parties to such transaction is to
  renew or maintain such business with the captive insurance company. No reinsurance
  premium tax shall be payable in connection with the receipt of assets in exchange
  for the assumption of loss reserves and other liabilities of a captive insurance company’s
  parent or affiliates if the intent of such exchange is to renew or maintain such business
  with the captive insurance company. (c)(1) The annual minimum aggregate tax to be paid by a captive insurance company calculated
  under subsections (a) and (b) of this section shall be $7,500.00. The annual maximum
  aggregate tax to be paid by a captive insurance company calculated under subsections
  (a) and (b) of this section shall be $200,000.00. (2) The annual minimum aggregate tax to be paid by a sponsored captive insurance company
  shall be $7,500.00 and shall apply to the sponsored captive insurance company as a
  whole and not to each protected cell; such cells shall not be subject to the minimum
  tax. (3) The annual maximum tax to be paid by a protected cell shall be as calculated under
  subdivision (1) of this subsection. The annual maximum tax to be remitted by a sponsored
  captive insurance company shall be the aggregate of the tax liabilities of each protected
  cell. (d) A captive insurance company failing to make returns as required by 32 V.S.A. chapter
  211 or failing to pay within the time required all taxes assessed by this section
  shall be subject to the provisions of 32 V.S.A. § 3202. (e) Subject to the provisions of subsection (c) of this section, two or more captive insurance
  companies under common ownership and control shall be taxed as though they were a
  single captive insurance company. (f) As used in this section: (1) “Common ownership and control” shall mean ownership and control of two or more captive
  insurance companies by the same person or group of persons. (2) “Ownership and control” shall mean: (A) in the case of a stock corporation, the direct or indirect ownership of 80 percent
  or more of the outstanding voting stock of the corporation; (B) in the case of a mutual or nonprofit corporation, the direct or indirect ownership
  of 80 percent or more of the surplus and the voting power of such corporation; (C) in the case of a limited liability company, the direct or indirect ownership of 80
  percent or more of the membership interests in the limited liability company; (D) in the case of a sponsored captive insurance company, for purposes of this section
  a protected cell shall be treated as a separate captive insurance company owned and
  controlled by the protected cell’s participant, but only if: (i) the participant is the only participant with respect to such protected cell; and (ii) the participant is the sponsor or is affiliated with the sponsor of the sponsored
  captive insurance company through common ownership and control. (g) The tax provided for in this section shall constitute all taxes collectible under
  the laws of this State from any captive insurance company, and no other occupation
  tax or other taxes shall be levied or collected from any captive insurance company
  by the State or any county, city, or municipality within this State, except meals
  and rooms taxes, sales and use taxes, and ad valorem taxes on real and personal property
  used in the production of income. (h) Annually, 13 percent of the premium tax revenues collected pursuant to this section
  shall be transferred to the Department of Financial Regulation for the regulation
  of captive insurance companies under this chapter. (i) [Repealed.] (j) The tax provided for in this section shall be calculated on an annual basis, notwithstanding
  policies or contracts of insurance or contracts of reinsurance issued on a multiyear
  basis. In the case of multiyear policies or contracts, the premium shall be prorated
  for purposes of determining the tax under this section. (k) A captive insurance company first licensed under this chapter on or after January
  1, 2017 shall receive a nonrefundable credit of $5,000.00 applied against the aggregate
  taxes owed for the first two taxable years for which the company has liability under
  this section. (Added 1981, No. 28; amended 1985, No. 170 (Adj. Sess.), § 2, eff. May 7, 1986; 1987, No. 47, § 3, eff. May 13, 1987; 1989, No. 72, § 2; 1989, No. 225 (Adj. Sess.), § 25(a); 1993, No. 89, §§ 15-17; 1993, No. 152 (Adj. Sess.), § 1, eff. May 16, 1994; 1995, No. 180 (Adj. Sess.), § 38(a); 1999, No. 38, § 14, eff. May 20, 1999; 1999, No. 49, § 218; 1999, No. 84 (Adj. Sess.), § 11, eff. April 19, 2000; 2001, No. 71, § 13a, eff. June 16, 2001; 2003, No. 55, § 7, eff. June 4, 2003, see effective date notes set out below; 2007, No. 49, §§ 11, 15; 2009, No. 42, §§ 18, 21, eff. May 27, 2009; 2009, No. 42, § 20; 2011, No. 21, § 20; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2013, No. 29, § 49, eff. May 13, 2013; 2017, No. 73, § 30; 2017, No. 90 (Adj. Sess.), § 3, eff. March 8, 2018; 2023, No. 12, § 2, eff. July 1, 2023.)