New York Laws
Article 91 - Taxes and Fees
9111-C - Temporary Franchise Tax on Certain Insurance Companies.

(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 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 provided in this subsection, 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 in 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. The
superintendent is hereby authorized and directed to deposit payments
made under this section, and any interest and penalties thereon, into
the miscellaneous special revenue fund.
(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.
(f) Return of excess collections. In the event that total collections
from the assessment levied pursuant to this section shall exceed the
amount required to be transferred and deposited by the medical

malpractice insurance association into the miscellaneous special revenue
fund pursuant to section five thousand five hundred sixteen-f of this
chapter, amounts in excess of such amount shall be returned to the
companies that paid such assessment on a pro rata basis. Provided,
further, that the amount required to be so transferred and deposited as
used in the preceding sentence shall be reduced by the "retained
amount", if any, as such term is defined in the following sentence. For
the purposes of this section, the term "retained amount", shall mean any
amount paid into the miscellaneous special revenue fund in accordance
with the provisions of section five thousand five hundred sixteen-f of
this chapter which is not the subject of any state or federal judicial
challenge at the time the calculation of amounts to be returned to
insurers pursuant to this subsection is to be made.
(g) Conditional application of tax. The provisions of subsections (a)
through (e) of this section shall apply to all premiums written during
the "event year" as such term is defined in paragraph one of subsection
(a) of this section. Provided, however, that if the portion of amounts
received by the miscellaneous special revenue fund from the medical
malpractice insurance association pursuant to the requirements of
section five thousand five hundred sixteen-f of this chapter is not less
than the amount required to be transferred and deposited to the
miscellaneous special revenue fund pursuant to section five thousand
five hundred sixteen-f of this chapter then the superintendent shall
certify to the commissioner of taxation and finance no later than
February fifth following the calendar year in which transfer and deposit
is required to be made by the medical malpractice insurance association
that the required transfer and deposit of such amounts has been made to
and received by the miscellaneous special revenue fund and in such event
the tax otherwise imposed by subsections (a) through (e) of this section
shall not be imposed and the provisions of such subsections (a) through
(e) shall in such event not be applied. Provided further, however, that
if there is a final judicial determination invalidating some or all of
the provisions of section five thousand five hundred sixteen-f of this
chapter and requiring a return from the miscellaneous special revenue
fund of any or all of the amounts transferred and deposited to it
pursuant to such section five thousand five hundred sixteen-f, then the
tax imposed pursuant to the provisions of subsections (a) through (e) of
this section shall be reinstated and the provisions of such subsections
(a) through (e) shall in such event be applied. In such event, the
superintendent shall notify the commissioner of taxation and finance
that such amounts have been returned from the miscellaneous special
revenue fund and the taxes imposed pursuant to subsections (a) through
(e) of this section as modified by subsection (f) of this section shall
be due and payable within thirty days of such notification.
(h) Judicial review. Notwithstanding any other law:
(1) Application for judicial review of final determination time
limitation; deposit; undertaking. Any final determination of the amount
of any tax payable under subsections (a) through (e) of this section
shall be reviewable for error, illegality or unconstitutionality or any
other reason whatsoever by a proceeding under article seventy-eight of
the civil practice law and rules if application therefor is made to the
supreme court within four months after the giving of the notice of such
final determination, provided, however, that any such proceeding under
article seventy-eight of the civil practice law and rules shall not be
instituted unless (A) the amount of any tax sought to be reviewed, with
such interest and penalties thereon as may be provided for by such law,
shall be first deposited with the superintendent and there is filed an
undertaking, issued by a surety company authorized to transact business

in this state and approved by the superintendent as to solvency and
responsibility, in such amount as a justice of the supreme court shall
approve to the effect that if such proceeding be dismissed or the tax
confirmed the petitioner will pay all costs and charges which may accrue
in the prosecution of such proceeding or (B) at the option of the
petitioner, such undertaking may be in sum sufficient to cover the
taxes, interest and penalties stated in such determination, plus the
costs and charges which may accrue against it in the prosecution of the
proceeding, in which event the petitioner shall not be required to
deposit such taxes, interest or penalties as a condition precedent to
the application.
(2) Judicial review of superintendent's denial of timely application
for refund or revision, time limitation; undertaking. Where any tax
imposed under such subsections (a) through (e) of this section is
asserted to have been erroneously, illegally or unconstitutionally
assessed or collected and application for the refund or revision thereof
timely made to the superintendent, and the superintendent shall have
made a determination denying such refund or revision, such determination
shall be reviewable by a proceeding under article seventy-eight of the
civil practice law and rules, provided (A) that such proceeding is
instituted within four months after giving of the notice of such denial,
(B) that a final determination of tax due was not previously made, and
(C) that an undertaking is filed with the superintendent in such amount
and with such sureties as a justice of the supreme court shall approve
to the effect that if such proceeding be dismissed, or the tax
confirmed, the petitioner will pay all costs and charges which may
accrue in the prosecution of such proceeding.
(3) Exception. Action for declaratory judgment; time limitation;
deposit; undertaking. Except as provided in paragraphs one and two of
this subsection, no determination or proposed determination of tax
imposed under subsections (a) through (e) of this section shall be
enjoined or reviewed by an action for declaratory judgment, an action
for money had and received or by any action or proceeding under article
seventy-eight of the civil practice law and rules, provided, however,
that a taxpayer may proceed by declaratory judgment, if suit is
instituted within thirty days after issuance of a notice of tax due and
the amount of the tax in controversy, with such interest and penalties
thereon as may be provided by such law, shall be deposited with the
superintendent and there is filed an undertaking, issued by a surety
company authorized to transact business in this state and approved by
the superintendent as to solvency and responsibility, in such amount as
a justice of the supreme court shall approve to the effect that if such
proceeding be dismissed or the tax confirmed the petitioner will pay all
costs and charges which may accrue in the prosecution of such proceeding
or at the option of the petitioner, such undertaking may be in a sum
sufficient to cover the taxes, interest and penalties stated in such
notice, plus the costs and charges which may accrue against it in the
prosecution of the proceeding, in which event the petitioner shall not
be required to deposit such taxes, interest or penalties as a condition
precedent to the application.
(4) Venue for any action or proceeding. Venue for any declaratory
judgment action, article seventy-eight proceeding or any other action or
proceeding in relation to this section shall be in the supreme court,
Albany county, and any such action or proceeding shall be entitled to a
preference both at trial and in any appeal.