(a) Except as provided in subsection (e) of this section, a domestic insurer, other than a mutual insurer doing business on the assessment
premium plan, shall pay to the Commissioner for the use of the State an annual privilege tax in the amount determined in accordance with
subsections (b) and (c) of this section, due and payable at the same time as the premium tax and estimated payments as provided in § 702
of this title. The payment of such privilege tax shall accompany a form as designated and furnished by the Commissioner, together with
such information required thereon relating to the provisions of this section.
(b) (1) For purposes of subsection (a) of this section, the privilege tax with respect to each year shall be an amount determined in
accordance with the following table, less any credits provided in subsection (c) of this section:
If annual gross receipts are: The annual privilege tax shall be:
Under $1,000,000 Exempt
$1,000,000 to $5,000,000 $10,000
$5,000,001 to $10,000,000 $25,000
$10,000,001 to $20,000,000 $45,000
$20,000,001 to $30,000,000 $65,000
$30,000,001 to $40,000,000 $85,000
over $40,000,000 $95,000
(2) For purposes of the foregoing table and subsection (e) of this section, the "annual gross receipts" of a domestic insurance company
shall consist of its net premium income and its investment income. As the terms are used herein:
a. The term "net premium income" shall mean an amount determined by taking the domestic insurer's gross direct premium
income and all other considerations for insurance received by the domestic insurer on account of insurance contracts, but excluding
considerations received for annuity contracts and funding agreements, and subtracting therefrom the amount of any returned
premiums on cancelled policies (but not including the return of cash surrender values of life insurance policies) and the unabsorbed
portion of any deposit premium and the amount returned to policyholders as dividends and similar returns, whether paid in cash or
credited or applied in reduction of premiums; and
b. The term "investment income" shall mean the amount shown on the line for investment income on the annual statement filed
in accordance with § 526(a) of this title.
(c) In determining the annual privilege tax under subsection (a) of this section, the amount of tax determined in the table provided in
subsection (b) of this section shall be reduced, but with respect to domestic insurers that do not maintain their principal offices in the State
to an amount not less than $15,000, by the credits with respect to such year provided in this subsection. Except as limited by subsection (d)
of this section, the domestic insurer subject to tax under this section is entitled to credits against annual privilege tax liability as follows:
For each $100,000 of gross salaries, wages and other compensation paid by the domestic insurer and its affiliates for employee services
performed within Delaware, the domestic insurer shall be entitled to a credit of $1,500 for such year.
Notwithstanding the above, any insurer which writes 50 percent or more of its total premium on property or persons residing within
this State shall be exempt from application and payment of the privilege tax.
(d) Domestic insurers shall not be entitled to carry-over or carry back or otherwise apply a credit to any year other than the year to
which the credit originally applies.
(e) In the case of domestic insurers with 1, 2 or 3 domestic insurer affiliates, only the affiliate with the largest gross receipts as defined
herein shall be subject to the annual privilege tax imposed pursuant to subsection (b) of this section. Any affiliates exceeding 3 in number
shall each be subject to the annual privilege tax.
(f) For purposes of subsections (c) and (e) of this section, "affiliate" shall: (i) have the same meaning as provided in subchapter V
of Chapter 7 of Title 5, and (ii) shall mean any corporation which is a member of a controlled group of corporations as defined in §
1563(a) of the Internal Revenue Code of 1986 ("IRC") [26 U.S.C. § 1563(a)], without regard to subsections (a)(4) and (b)(2)(D) of IRC‹ Prev All Delaware sections Next ›
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