§ 31–205. Required annual statement of business; tax payments; annuities exemption.

(a) Every insurance company and association doing business in the District of Columbia shall, through its local agents or representatives, furnish to the Commissioner, during the month of January of each year, a statement of its business in the District, setting forth specifically the net amount of its premium receipts, the amount of losses paid, the amount of expenses incurred, respecting the business done in the District during the calendar year next preceding, and the Commissioner shall preserve a separate record of the same in his office for convenient reference, showing the ratio of such losses and expenses, respectively, to the premium receipts.

(b) Every insurance company or association of whatever kind or character, not including fraternal beneficiary associations, shall, as required by law, pay to the Director of the Department of Finance and Revenue, or to a depository designated by the Director, in lieu of all other taxes, except taxes upon real estate and any license fees provided for in § 31-804 [repealed] an amount equal to the following:

(1)(A) One and seven tenths percent of the gross amount of premiums received during the preceding calendar year by every life insurance company or association, not including fraternal beneficiary associations, or the gross payments or deposits collected from holders of fraternal beneficiary association certificates, on contracts of insurance covering risks resident in the District during the preceding year, including contracts for group insurance and annuities and without including or deducting any amounts received or paid for reinsurance.

(B) In determining the gross amount of premiums to be taxed, there shall be excluded all premiums received from policies or contracts issued in connection with a pension, annuity, profit-sharing plan or individual retirement annuity qualified or exempt under §§ 401, 403, 404, 408, or 501(a) of the Internal Revenue Code, or successor provisions, and all premiums returned to policyholders or annuitants during the preceding calendar year, except cash surrender values, all dividends that, during the year, have been paid in cash or applied in reduction of premiums or left to accumulate to the credit of policyholders or annuitants.

(C) In determining the gross amount of premiums to be taxed, there shall be excluded all consideration received in connection with an annuity contract whether or not such contract is qualified or exempt under the Internal Revenue Code, and all premiums returned to policyholders or annuitants during the preceding calendar year, except cash surrender values, and all dividends that, during said year, have been paid in cash or applied in reduction of premiums or left to accumulate to the credit of policyholders or annuitants.

(2) One and seven tenths percent of the gross amount of premiums, assessments, and fees received during the preceding calendar year by every company or association other than life on contracts of insurance other than life for business done in the District, after deducting the amount returned upon canceled policies, certificates, and rejected applications.

(3) Except as provided in paragraph (4) of this subsection, the premium tax shall be paid on or before March 1 of the year following the calendar year for which the tax is due. The Commissioner may suspend or revoke the license of a company or association that fails to pay premium tax on or before the due date.

(4) Each insurance company and association transacting business in the District whose District premium tax liability for the preceding calendar year was $1,000 or more shall remit on or before June 1, on a prepayment basis, an amount equal to one-half of the premium tax liability for the preceding calendar year. The sums prepaid by a company or association under this subsection shall be allowed as credits against its premium tax liability for the calendar year during which the payments are made. If a prepayment made under this subsection exceeds the annual premium tax liability, the excess shall be allowed as a credit against subsequent prepayment or tax liabilities. The Commissioner may suspend or revoke the license of a company or association that fails to make a prepayment on or before the due date.

(c) A hospital service corporation or medical service corporation may deduct, up to $550,000, the corporation’s payment to the rate stabilization fund under § 31-3514 and payments and expenditures pursuant to a public-private partnership entered into in accordance with Chapter 35 of this title from the amount otherwise due by the corporation under subsection (b) of this section.

(d) The Commissioner shall determine whether or not the tax remitted is correct. If the tax remitted is not sufficient, the Commissioner shall notify the delinquent company of the amount of such delinquency and certify the amount thereof to the Department of Finance and Revenue which shall proceed to collect such delinquency.

(e) An insurer may offset an assessment made pursuant to § 31-5406 (“Life and Health Insurance Guaranty Association Act”), against its premium tax liability pursuant to § 31-5410 to the extent of 10% of the amount of the assessment for each of the 10 calendar years following the year in which the assessment was paid. If an insurer ceases doing business, all uncredited assessments may be credited against its premium tax liability for the year it ceases doing business.

(f)(1) When by the laws of any other jurisdiction a premium or income or other taxes, or fees, fines, penalties, licenses, deposit requirement, or other obligations, prohibitions or restrictions are imposed upon District domestic insurance companies doing business in the other jurisdiction, or upon the agents of District companies, which in the aggregate are in excess of the aggregate of the taxes, fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions directly imposed upon insurance companies of the other jurisdiction under the statutes of the District, the same obligations, prohibitions or restrictions for whatever kind are in the same manner and for the same purpose imposed upon insurance companies of the other jurisdiction doing business in the District.

(2) Insurance premium taxes paid which were not paid under protest shall not be refunded if the refund claim is based upon an alleged error or mistake of law or erroneous interpretation of statute regarding the validity or legality of this section under the laws or constitution of the United States.

(3) For the purpose of this section, an alien insurer is deemed domiciled in a United States jurisdiction designated by it wherein it has established its principal office or agency in the United States, maintains the largest amount of its assets held in trust or on deposit for the security of its policyholders or policyholders and creditors in the United States, or in which it was admitted to do business in the United States.

(4) This section does not apply to ad valorem taxes on real or personal property or to personal income taxes.

(Mar. 3, 1901, 31 Stat. 1291, ch. 854, § 650; June 30, 1902, 32 Stat. 534, ch. 1329; May 21, 1997, D.C. Law 11-268, 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86, § 201, 45 DCR 1172; Mar. 2, 2007, D.C. Law 16-192, § 5013(a), 53 DCR 6899; Feb. 4, 2010, D.C. Law 18-104, § 4(a), 56 DCR 9182; Sept. 24, 2010, D.C. Law 18-223, § 2182, 57 DCR 6242.)

Prior Codifications

1981 Ed., § 35-105.

1973 Ed., § 35-105.

Section References

This section is referenced in § 31-3514, § 31-5231, and § 31-5233.

Effect of Amendments

D.C. Law 16-192, in subsec. (b), deleted “and nonprofit hospital and medical service corporations” following “beneficiary associations”; and rewrote subsec. (c) which had read as follows: “(c) Notwithstanding section 105, a hospital service corporation, medical service corporation, pharmaceutical service corporation, optometric service corporation and any other health service corporation shall pay as taxes to the director of the Department of Finance and Revenue an amount equal to 1% of the gross amount of payments received during the preceding calendar year for subscriber contracts covering residents in the District after deducting the amounts returned to subscribers upon canceled subscriber contracts and rejected applications.”

D.C. Law 18-104, in subsec. (c), substituted “payment to the rate stabilization fund under § 31-3514, and payments and expenditures pursuant to a public-private partnership entered into in accordance with Chapter 35 of this title,” for “payment to the rate stabilization fund under § 31-3514,”.

D.C. Law 18-223, in subsecs. (b)(1A) and (2), substituted “Two” for “One and seven tenths”.

Cross References

Annual statements and taxes, see § 31-5202.

Insurance companies, taxation and fiscal affairs, see § 47-2601 et seq.

Liability for failure to pay tax, see § 47-2609.

Retaliatory charges against certain insurance companies, see § 47-2610.

Emergency Legislation

For temporary (90 day) amendment of section, see § 5013(a) of Fiscal Year 2007 Budget Support Emergency Act of 2006 (D.C. Act 16-477, August 8, 2006, 53 DCR 7068).

For temporary (90 day) amendment of section, see § 5013(a) of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2006 (D.C. Act 16-499, October 23, 2006, 53 DCR 8845).

For temporary (90 day) amendment of section, see § 5013(a) of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2007 (D.C. Act 17-1, January 16, 2007, 54 DCR 1165).

For temporary (90 day) amendment of section, see § 4(a) of Hospital and Medical Services Corporation Regulatory Emergency Amendment Act of 2009 (D.C. Act 18-277, January 11, 2010, 57 DCR 935).

For temporary (90 day) amendment of section, see § 2182 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).

Temporary Legislation

For temporary (225 day) amendment of section, see § 4(a) of the Hospital and Medical Services Corporation Regulatory Temporary Amendment Act of 2010 (D.C. Law 18-134, March 23, 2010, law notification 57 DCR 3373).

References in Text

“ Sections 401, 403, 404, 408, and 501(a) of the Internal Revenue Code,” referred to in (b)(1)(B), are codified at 26 U.S.C. §§ 401, 403, 404, 408, and 501(a), respectively.

Pursuant to the Office of the Chief Financial Officer’s “Notice of Public Interest” published in the April 18, 1997, issue of the District of Columbia Register ( 44 DCR 2345) the Office of Tax and Revenue assumed all of the duties and functions previously performed by the Department of Finance and Revenue, as set forth in Commissioner’s Order 69-96, dated March 7, 1969. This action was made effective January 22, 1997, nunc pro tunc.

Editor's Notes

Application of Law 12-86: Section 203 of D.C. Law 12-86 provided that the provisions of title II of the act shall be applicable to premiums received during the calendar year beginning Jan. 1, 1998, and subsequent years.

Office of Collector of Taxes abolished: The Office of the Collector of Taxes was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. All functions of the Office of the Collector of Taxes including the functions of all officers, employees, and subordinate agencies were transferred to the Director, Department of General Administration by Reorganization Order No. 3, dated August 28, 1952. Reorganization Order No. 20, dated November 10, 1952, transferred the functions of the Collector of Taxes to the Finance Office. The same Order provided for the Office of the Collector of Taxes headed by a Collector in the Finance Office, and abolished the previously existing Office of the Collector of Taxes. Reorganization Order No. 20 was superseded and replaced by Organization Order No. 121, dated December 12, 1957, which provided that the Finance Office (consisting of the Office of the Finance Officer, Property Tax Division, Revenue Division, Treasury Division, Accounting Division, and Data Processing Division) would continue under the direction and control of the Director of General Administration, and that the Treasury Division would perform the function of collecting revenues of the District of Columbia and depositing the same with the Treasurer of the United States. Organization Order No. 121 was revoked by Organization Order No. 3, dated December 13, 1967, Part IVC of which prescribed the functions of the Finance Office within a newly established Department of General Administration. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by § 401 of Reorganization Plan No. 3 of 1967. Functions of the Finance Office as stated in Part IVC of Organization Order No. 3 were transferred to the Director of the Department of Finance and Revenue by Commissioner’s Order No. 69-96, dated March 7, 1969. The collection functions of the Director of the Department of Finance and Revenue were transferred to the District of Columbia Treasurer by § 47-316 on March 5, 1981.

Department of Insurance abolished: See Historical and Statutory Notes following § 31-201.

For temporary delay until Jan. 1, 1999, of the applicability of D.C. Law 12-86, as stated in § 203 of the Omnibus Regulatory Reform Amendment Act of 1998 (D.C. Law 12-86), see § 502 of the Health Insurance Portability and Accountability Federal Law Conformity, Motor Vehicle Insurance, Regulatory Reform, and Consumer Law Temporary Amendment Act of 1998 (D.C. Law 12-154, § 502).

Section 601(b) of D.C. Law 12-154 provided that the act shall expire after 225 days of its having taken effect.

For temporary delay of the provisions of § 203 of the Omnibus Regulatory Reform Amendment Act of 1998 (D.C. Law 12-86), see § 502 of the Health Insurance Portability and Accountability Federal Law Conformity Emergency Amendment Act of 1998 (D.C. Act 12-339, May 4, 1998, 45 DCR 2947).

Section 2184 of D.C. Law 18-223 provided: “Sunset. This subtitle shall expire on September 30, 2015.”