SECTIONS 13201-13222 - California Statutes

REVENUE AND TAXATION CODE

SECTION 13201-13222

13201. This part shall be known and may be cited as the Nonadmitted
Insurance Tax Law.

13203. For purposes of this part:
(a) "Person" means an individual, bank, corporation, partnership,
limited liability company, society, association, organization, joint
stock company, estate, or trust, or a receiver, trustee, assignee,
referee or any other person acting in a fiduciary capacity, whether
appointed by a court or otherwise, or any combination thereof.
(b) "Taxpayer" means any person subject to the tax imposed by this
part.

13210. (a) For gross premiums paid or to be paid on insurance
contracts that take effect or are renewed on or after January 1,
1994, every person who effects insurance governed by Chapter 6
(commencing with Section 1760) of Part 2 of Division 1 of the
Insurance Code shall pay a gross premium tax of 3 percent for the use
of the state, less 3 percent of returned premiums that were subject
to the tax received by reason of cancellation or reduction of
premium.
(1) This section shall not apply to any of the following:
(A) Insurance coverage for which a tax on the gross premium is due
or has been paid pursuant to Section 1775.5 of the Insurance Code.
(B) Gross premiums paid and returned premiums received by that
person upon business governed by the provisions of Section 1760.5 of
the Insurance Code.
(C) Insurance coverage for which a tax on the gross premium is due
or has been paid pursuant to Section 132 of the Insurance Code.
(2) If during any calendar quarter 3 percent of the returned
premiums received that were subject to the tax imposed by this part
exceed 3 percent of the gross premiums paid or to be paid by that
person on contracts that took effect or were renewed in that calendar
quarter, then that person may either carry forward the excess to a
succeeding calendar quarter and apply it as a credit against the 3
percent of gross premiums paid or to be paid by that person in the
succeeding calendar quarter, or the person may elect to receive, and
be paid a refund equal to the amount of taxes paid by the person on
the excess of returned premiums received over gross premiums paid or
to be paid.
(b) For purposes of determining the tax, the total premium paid or
to be paid for all nonadmitted insurance placed in a single
transaction with one underwriter or group of underwriters, whether in
one or more policies, in that calendar quarter during which the
taxable insurance contract or contracts took effect or were renewed,
shall be allocated to this state in the proportion that the total
premium on the insured properties or operations in this state, as
computed on the exposure in this state on the basis of any single
standard rating method in use in all states or countries where the
insurance applies, bears to the total premium so computed in all
states or countries in which that nonadmitted insurance may apply or,
with prior approval of the Franchise Tax Board, on any other
reasonable basis as determined by the Franchise Tax Board in its sole
discretion.
(c) Subdivision (b) shall not apply to interstate motor transit
operations conducted between this and other states. With respect to
those operations, the tax shall be payable on the entire premium
charged on all nonadmitted insurance, less any of the following:
(1) The portion of the premium that is determined to have been
charged for operations in other states that have taxed the premium on
operations in states of an insured maintaining its headquarters
office in this state.
(2) The premium for any operations outside of this state of an
insured who maintains a headquarters operating office outside of this
state and a branch office in this state.

13220. (a) Every person subject to this part shall file with the
Franchise Tax Board a return prescribed by the board on or before the
first day of the third month following the close of the calendar
quarter during which a taxable insurance contract took effect or was
renewed.
(b) In accordance with forms and instructions, the tax, penalties,
and interest imposed by this part shall be administered and enforced
by the Franchise Tax Board as though they are taxes imposed under
Part 10 (commencing with Section 17001). Part 10 (commencing with
Section 17001), Part 10.2 (commencing with Section 18401), or any
other applicable law shall apply for this purpose in the same manner
and with the same force and effect as if the language of Part 10
(commencing with Section 17001), Part 10.2 (commencing with Section
18401), or the other applicable law is incorporated in full into this
part, except to the extent that the provision is either inconsistent
with a provision of this part, is not relevant to this part, or is
otherwise provided for under this part.
(c) The following penalties shall apply, in lieu of those
penalties provided under Part 10.2 (commencing with Section 18401):
(1) A penalty of 10 percent of the amount of the payment due is
imposed upon any person who fails to make the necessary payment
within the time required.
(2) For any part of a payment required that was not made within
the time required by law, when the nonpayment or late payment was due
to fraud on the part of the taxpayer, a penalty of 25 percent of the
amount unpaid shall be added thereto, in addition to all other
penalties otherwise imposed.
(d) (1) Except as provided in paragraph (2), interest shall be
allowed and paid on any refund provided under paragraph (2) of
subdivision (a) of Section 13210 from the date the claim for refund
is filed. No interest shall be allowed or paid on amounts credited to
succeeding calendar quarters as provided under paragraph (2) of
subdivision (a) of Section 13210.
(2) If an amount refunded as provided under paragraph (2) of
subdivision (a) of Section 13210 within 120 days after a claim or
return is filed, or within 120 days after the last date for filing
the tax return, whichever is later, no interest shall be allowed on
the amount of the refund.
(e) The period of limitation for allowing or making refunds or
credits as provided under paragraph (2) of subdivision (a) of Section
13210 shall be the period of limitations for allowing or making
refunds or credits of overpayments under Part 10.2 (commencing with
Section 18401), except that the "date of cancellation or reduction of
premium" shall be substituted for "date of overpayment."

13221. In the event that a person subject to tax is delinquent in
the payment of any amount due under this part, and that person also
has an amount imposed and due and payable under Part 10 (commencing
with Section 17001), Part 10.2 (commencing with Section 18401), or
Part 11 (commencing with Section 23001), any amounts collected by the
Franchise Tax Board shall be applied first to the payment of those
taxes, additions to tax, penalties, interest, fees, or other amounts
imposed and due and payable under Part 10 (commencing with Section
17001), Part 10.2 (commencing with Section 18401), or Part 11
(commencing with Section 23001).

13222. (a) All amounts collected shall be transmitted to the
Treasurer and deposited in the State Treasury to the credit of the
Insurance Tax Fund that is created by Section 13151.
(b) Moneys in the Insurance Tax Fund shall be drawn therefrom for
the purpose of paying refunds under this part.