26.1-03-17. Commissioner to collect premium tax - Insurance companies generally -
Computation - Credits - Penalty - Estimated tax.
1. Before issuing the annual certificate required by law, the commissioner shall collect
from every stock and mutual insurance company, nonprofit health service corporation,
health maintenance organization, and prepaid legal service organization, except
fraternal benefit and benevolent societies, doing business in this state, a tax on the
gross amount of premiums, assessments, membership fees, subscriber fees, policy
fees, service fees collected by any third-party administrator providing administrative
services to a group that is self-insured for health care benefits, and finance and
service charges received in this state during the preceding calendar year, at the rate of
two percent with respect to life insurance, one and three-fourths percent with respect
to accident and health insurance, and one and three-fourths percent with respect to all
other lines of insurance. This tax does not apply to considerations for annuities. The
total tax is payable on or before March first following the year for which the tax is
assessable. If the due date falls on a Saturday or legal holiday, the tax is payable on
the next succeeding business day. Collections from this tax must be deposited in the
insurance tax distribution fund under sections 18-04-04.1 and 18-04-05. Collections
from this tax exceeding the sum of the amount deposited in the insurance tax
distribution fund must be deposited in the general fund in the state treasury.
2. An insurance company, nonprofit health service corporation, health maintenance
organization, or prepaid legal service organization subject to the tax imposed by
subsection 1 is entitled to a credit against the tax due for the amount of any
assessment paid as a member of a comprehensive health association under
subsection 3 of section 26.1-08-09 for which the member may be liable for the year in
which the assessment was paid, a credit against the tax due for the amount of any
assessment paid as a member of the reinsurance association of North Dakota under
section 26.1-36.7-06 for which the member may be liable for the year in which the
assessment is paid, a credit as provided under section 26.1-38.1-10, a credit against
the tax due for an amount equal to the examination fees paid to the commissioner
under sections 26.1-01-07, 26.1-02-02, 26.1-03-19.6, 26.1-03-22, 26.1-17-32, and
26.1-18.1-18, and a credit against the tax due for an amount equal to the ad valorem
taxes, whether direct or in the form of rent, on that proportion of premises occupied as
the principal office in this state for over one-half of the year for which the tax is paid.
The credits under this subsection must be prorated on a quarterly basis and may not
exceed the total tax liability under subsection 1.
3. Any company failing to pay the tax imposed by subsection 1, within the time required,
is subject to a penalty of one hundred dollars plus twenty-five dollars per day,
excepting the first day after the tax became due. Any company failing to file the
appropriate tax statement required by rule if the tax is zero is subject to a penalty of
twenty-five dollars per day for each day's neglect not to exceed five hundred dollars.
The commissioner, if satisfied that the delay was excusable, may waive, and if paid,
issue a premium tax credit for all or any part of the penalty and interest.
4. Every stock and mutual insurance company, nonprofit health service corporation,
health maintenance organization, and prepaid legal service organization, except
fraternal benefit or benevolent societies, doing business in this state required to pay
premium taxes in this state shall make and file a statement of estimated premium
taxes. The statement and payment must be made on a quarterly basis as prescribed
by the commissioner. Failure of a company to make payments of at least one-fourth of
the total tax paid during the previous calendar year, or eighty percent of the actual tax
for the quarter being reported of the current calendar year, shall subject the company
to the penalty and interest provided in subsection 3.
5. If an amount of tax, penalty, or interest has been paid which was not due under the
provisions of this section, a refund may be issued to the taxpayer who made the
erroneous payment. The refund is allowed as a credit against any tax due or to
become due under this section or as a cash refund, at the discretion of the
commissioner. The taxpayer who made the erroneous payment shall present a claim
for refund to the commissioner not later than two years after the due date of the return
for the period for which the erroneous payment was made.
6. In lieu of the tax required by subsection 1, the commissioner shall collect from each
entity subject to this section an annual filing fee in the amount of two hundred dollars,
provided the total tax liability of the entity pursuant to subsection 1 is less than two
hundred dollars. No annual filing fee is due or may be collected from an entity if its
total tax liability pursuant to subsection 1 is in excess of two hundred dollars. The
annual filing fee may be reduced by any credits available pursuant to subsections 2
and 5. Failure of a company to pay the two hundred dollar filing fee subjects the
company to the penalty as provided in subsection 3.
