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CHAPTER VIII.

ANNUAL TAX ON INSURANCE COMPANIES, BASED ON Gross

PREMIUMS.

Premiums received on business done in the state defined. The tax is computed on the basis of premiums received on business done at any time in the state and is for the privilege enjoyed and not on the property in the state in the case of a foreign fire insurance company. People ex rel. Conn. Mutual Life Ins. Co. v. Kelsey, 116 App. Div. 97 (1906).

Franchise tax on insurance corporations.- An annual state tax for the privilege of exercising corporate franchises or for carrying on business in their corporate or organized capacity within this state equal to one per centum on the gross amount of premiums received during the preceding calendar year for business done at any time in this state, which gross amount of premiums shall include all premiums received during such preceding calendar year on all policies, certificates, renewals, policies subsequently canceled, insurance and reinsurance during such preceding calendar year, and all premiums that are received during such preceding calendar year on all policies, certificates, renewals, policies subsequently canceled, insurance and reinsurance executed, issued or delivered in all years prior to such preceding calendar year, whether such premiums were in the form of money, notes, credits, or any other substitute for money, shall be paid annually into the treasury of the state, on or before the first day of June by the following corporations :

1. Every domestic insurance corporation, incorporated, organized or formed under, by, or pursuant to a general or special law;

2. Every insurance corporation, incorporated, organized or formed under, by, or pursuant to the laws of any other state of the United States, and doing business in this state, except a corporation doing a fire insurance business or a marine insurance business;

3. Every insurance corporation, incorporated, organized or formed under, by, or pursuant to the laws of any state without the United States, or of any foreign country, except such a corporation doing

a life, health or casualty insurance business, and doing business in this state; but the tax on gross premiums of a corporation so incorporated, organized or formed and doing a fire or marine insurance business within the state shall be equal to five-tenths of one per centum. This section does not apply to a fraternal beneficiary society, order or association, a corporation for the insurance of domestic animals, a town or county co-operative insurance corporation, nor to any corporation subject to the supervision of or required by or in pursuance of law to report to the superintendent of banks; but this section does apply to an individual, or partnership, or association of underwriters known as Lloyds in so far as corporations doing the same kind of insurance business are subject to its provisions. The taxes imposed by this section shall be in addition to all other fees, licenses or taxes imposed by this or any other law, except that in assessing taxes under the reciprocal provisions of section thirty-four of the insurance law, credit shall be allowed for any taxes paid under this section. The term "insurance corporations” as used in this article shall include a corporation, association, joint-stock company or association, person, society, aggregation or partnership by whatever name known doing an insurance business in this state. (Present and former sec. 187, Tax Law, as amended by ch. 494, L. 1897, ch. 118, L. 1901, and ch. 94, L. 1905.)

Source: Sec. 5, ch. 361, L. 1881, as amended by ch. 425, L. 1895; sec. 1, ch. 679, L. 1886, as amended by ch. 418, L. 1895. No deductions for the two per cent. annual tax payable to superintendent of insurance. Under subdivision 2, section 187, as amended by Chapter 118, Laws of 1901, the tax imposed is in addition to all other fees, licenses and taxes, and a foreign marine insurance company cannot deduct the annual tax of two per cent. payable to the superintendent of insurance under section 34, Insurance Law. People v. Thames & Mersey Marine Ins. Co., 176 N. Y. 531 (1903). Section 34 reads as follows:

Taxation of foreign corporations.—“The capital of an insurance corporation incorporated under the laws of any state or country outside of the United States, to the extent employed in the transaction of business in this state, and as determined and certified as prescribed by section twenty-seven of this chapter, shall be subject to taxation the same as the capital of a like domestic insurance corporation, to be levied, assessed and collected, as prescribed by law, at such place in the state as it shall have its principal office. Upon satisfactory proof to the superintendent of insurance that any foreign insurance corporation has neglected or refused to pay any tax levied and assessed under the laws of this state, he shall revoke any certificate of authority granted by him to such corporation to do business in this state, and it shall thereafter be precluded from doing business herein. Every health, or casualty insurance corporation incorporated by or organized under the laws of any government outside of the United States engaged in the transaction of the business of health or casualty insurance in this state shall annually on or before the first day of March, pay to the superintendent of insurance a tax of two per centum on all premiums received in cash or otherwise by its attorneys or agents in this state during the year ending on the preceding thirty-first day of December, upon which a tax on premiums has not been paid to any other state. Every life insurance corporation incorporated by or organized under the laws of any government outside of the United States engaged in the transaction of the business of life insurance in this state shall annually on or before the first day of March, pay to the superintendent of insurance a tax of one per centum on all premiums received in cash or otherwise by its attorneys or agents in this state during the year ending on the preceding thirty-first day of December, upon which a tax on premiums has not been paid to any other state. If any such corporation shall neglect or refuse to pay such tax, the superintendent shall collect the same out of the interest on the stocks or securities deposited in the insurance department. The agent of every corporation, association or individual not incorporated by the laws of this state to effect insurances against marine risks, shall annually, on or before the first day of February, pay to the superinten. dent of insurance a tax of two per centum upon the amount of all premiums upon insurances against marine risks which have been received by such agent or any person for him or have been agreed to be paid for any such insurance effected or agreed to be effected or procured by him, within this state, for the year ending the thirty-first day of December preceding. In ascertaining the amount of premiums upon which said two per centum tax is to be levied, there shall be deducted from the premiums aforesaid, on account of reinsurances, such portion of the premiums upon said reinsurances as may have been paid to companies that are subject to the payment of the tax hereby provided for.” (Former sec. 34, Ins. Law, as amended by ch. 725, L. 1893, and ch. 708, L. 1904.)

Amendment of 1905.—Chapter 94 of the Laws of 1905 amends section 187 of the Tax Law and materially changes the method of computing the tax on insurance companies. Prior to the passage of this law it had been held that a tax of one per cent., imposed under section 187 of the Tax Law, on the gross premiums of domestic insurance companies applied only to first year premiums on new policies and not to renewal policies. People ex rel. Provident S. L. A. Society v. Miller, 179 N. Y. 227 (1904); reversing 88 App. Div. 218, Vann and Bartlett, JJ., dissenting. By the amendment of 1905 a tax is now imposed not only on premiums collected on new policies but also on the gross amount of premiums received during the preceding calendar year on all policies, all renewal premiums, insurance and re-insurance executed, issued and delivered in all years prior to such preceding calendar year. See also People ex rel. Conn. Mutual Life Ins. Co. v. Kelsey, 116 App. Div. 97 (1906).

A somewhat different question was raised in People ex rel. Continental Insurance Co. v. Miller, 177 N. Y. 515 (1904), in which the court held that the premiums refunded to policy holders of domestic fire insurance companies are not to be taxed under section 187, since no “business is done” after the cancellation of the policy.

CHAPTER IX.

ANNUAL FRANCHISE Tax On TRUST COMPANIES, SAVINGS

BANKS AND FOREIGN BANKERS.

Relieved from all other taxes.—Trust companies were intended to be relieved by section 188 (former sec. 187a), Tax Law, from taxation on personal property from all other purposes from the date of the passage of the act, March 21, 1901. Binghamton Trust Co. v. Binghamton, 72 App. Div. 341 (1902).

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Franchise tax on trust companies. Every trust company, incorporated, organized or formed under, by or pursuant to a law of this state, and any company authorized to do a trust company's business solely or in connection with any other business, under a general or special law of this state, shall pay to the state annually for the privilege of exercising its corporate franchise or carrying on its business in such corporate or organized capacity, an annual tax which shall be equal to one per centum on the amount of its capital stock, surplus and undivided profits. (Sec. 188, former sec. 187a, Tax Law, added by ch, 132, L. 1901, and amended by ch, 535, L. 1901.)

Apportionment of tax.-If the trust company has not been doing business during the entire fiscal year, the tax must be apportioned accordingly. People ex rel. Mutual Trust Co. v. Miller, 177 N. Y. 51 (1903); see People ex rel. Bklyn R. T. Co. v. Morgan, 57 App. Div. 335; People ex rel. Fort George R. Co. v. Miller, 90 App. Div. 588 (1904); People ex rel. Wall & Hanover R. Co. v. Miller, 98 App. Div. 584 (1904).

Franchise tax on savings banks.— Every savings bank incorporated, organized or formed under, by or pursuant to a law of this state, shall pay to the state annually for the privilege of exercising its corporate franchises or rrying on its business in such corporate or organized capacity, an annual tax which shall be equal to one per centum on the par value of its surplus and undivided earnings. (Sec. 189, Taw Law, formerly sec. 187b, added by ch. 117, L. 1901.)

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