On remand from the Maryland Court of Special Appeals, the Maryland Tax Court held that an unauthorized insurance company owned by Macy’s, was exempt from Maryland corporate income tax. During the years at issue, Leadville, a Vermont captive, did not earn any Maryland insurance or reinsurance premiums but had substantial interest income from intercompany loans
New York State Advisory Opinion: Non-US Unauthorized Life Insurance Companies’ Premiums Excluded from Apportionment Factor
By Dmitrii Gabrielov and Andrew Appleby
The New York State Department of Taxation and Finance issued an advisory opinion determining that non-US unauthorized life insurance companies’ premiums were not includable in the New York State insurance franchise tax apportionment factor. The Department reasoned that the apportionment statute requires a life insurance company to report its…
New York State Appellate Division Affirms that HMOs Were Subject to New York City General Corporation Tax
By Dmitrii Gabrielov and Andrew Appleby
The New York State Supreme Court, Appellate Division, affirmed the New York City Tax Appeals Tribunal’s (Tribunal) decision that Aetna’s subsidiary health maintenance organizations (HMOs) were subject to the New York City General Corporation Tax (GCT) for 2005 and 2006. The Appellate Division determined that the Tribunal’s reasoning…
New York State Tax Appeals Tribunal: Assessment of Non-Admitted Alien Insurance Companies Violated Tax Treaty and Foreign Commerce Clause
By Huy “Mike” Le and Andrew Appleby
The New York State Tax Appeals Tribunal (Tribunal) held that the Department’s assessment of two non-admitted German insurance companies violated the United States-Germany Tax Treaty’s anti-discrimination clause and the US Constitution’s Foreign Commerce Clause.
The alien non-admitted non-life insurance companies had no premiums from sources in the United…
New York State Tax Appeals Tribunal: Payments to Captive Insurance Company Did Not Qualify as Deductible Insurance Premiums
By Andrew Appleby and Dmitrii Gabrielov
The New York State Tax Appeals Tribunal released its precedential decision in Stewart’s Shops, affirming an Administrative Law Judge’s determination that payments by a corporation to its captive insurance company did not qualify as deductible insurance premiums because the arrangement did not constitute insurance for federal income tax…
Maryland Tax Court Reiterates That Nonadmitted Insurance Companies Are Exempt from Maryland Corporate Income Tax
By Robert Merten and Andrew Appleby
The Maryland Tax Court granted a summary judgment motion exempting a Vermont-licensed insurance company from almost $24 million in corporate income tax, interest, and penalties. The short two-page order swiftly cites to and expressly follows the court’s previous order in the 2015 case, Nat’l Indem. Co. v. Comptroller of…
Washington ALJ Rules Out-of-State Insurance Provider’s Marketing Subject to Business & Occupation Tax as Other Services
By Alla Raykin and Jonathan Feldman
An administrative law judge (ALJ) held that a taxpayer’s activities in Washington were not selling, soliciting or negotiating insurance in the state, but rather marketing other in-state insurance companies’ products and receiving commissions from those marketing materials. Accordingly, the taxpayer was not eligible for the lower business & occupation…
New York Issues Two Advisory Opinions Regarding Surplus Lines Insurance
The New York State Department of Taxation and Finance issued two advisory opinions determining that surplus lines insurance companies are subject to uncapped insurance franchise tax instead of premium tax.
- The Department’s position treats authorized non-life insurance companies differently than unauthorized non-life insurance companies.
- The Department rejected the insurance companies’ argument that New York’s direct
NYC Tax Appeals Tribunal Determines HMO Subject to General Corporation Tax
The New York City Tax Appeals Tribunal reversed an administrative law judge (ALJ) and determined that a health maintenance organization (HMO) was subject to the New York City general corporation tax.
In Aetna, the parties stipulated that all the requirements for combination had been satisfied, so the sole issue was whether…
Running on Empty: New York State ALJ Denies Deduction for Payments Made to Captive Insurance Company
By Charles Capouet and Andrew Appleby
A New York State Division of Tax Appeals ALJ determined that payments by a corporation to its captive insurance company did not qualify as deductible insurance premiums because the arrangement lacked risk shifting and risk distribution. The taxpayer primarily owned and operated convenience stores and gas stations, and insured…