DELAWARE DEPARTMENT OF INSURANCE
Domestic Insurers' Privilege Tax
Insurers considered "Delaware domestic insurers" - insurance companies incorporated in the State of Delaware - are subject to an additional Domestic Insurers' Privilege Tax, as set forth in Title18, Delaware Insurance Code, Section 703. This tax is separate from premium tax, though it is due and filed in conjunction with the annual premium tax filing, and must be included when calculating quarterly premium tax prepayments.
To determine the privilege tax amount, each domestic insurer must calculate its "Annual Gross Receipts" based on Net Premium Income plus Investment Income. The amount of privilege tax is then taken from a sliding scale (see Table below). Net premium income, for the purposes of this section, consists of gross direct premiums plus "all other considerations" which includes assumed reinsurance premiums. The instructions for Privilege Tax section of the Annual Premium Tax and Fees Report specify which figures from the company's Annual Statement are to be used in making the calculations.
DELAWARE DOMESTIC INSURERS' PRIVILEGE TAX
(Taken from 18 Del. C., §703)
CREDITS: From the calculated Annual Gross Receipts, the domestic insurers may be eligible for one or more of the following credits applicable to the privilege tax amount:
IMPORTANT INFORMATION REGARDING COMPANY RE-DOMESTICATION
It is the Insurance Department's position that if a company is a Delaware domestic insurer for any part of the tax year, the insurer is subject to the full amount of privilege tax for that tax year as calculated according to 18 Del. C., §703. In addition, Delaware law does not provide for a prorata refund of privilege tax. This tax is an annual one based on the annual gross receipts of the prior year for domestic companies who are domesticated in Delaware on the first day of the current tax year and who remain domesticated for the whole or any part of the current tax year.
Premium tax questions can be directed to Mrs. Ann Fletcher at Ann.Fletcher@state.de.us
|If Annual Gross Receipts Are:||The Annual Privilege Tax Shall Be:|
|$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|