Ó£»¨ÊÓƵ

Insurance Premiums Tax

The Insurance Premiums Tax applies to premiums collected on insurance risks by every insurance company transacting business in Ó£»¨ÊÓƵ. The tax base is gross contract premiums less specified deductions. Annuity considerations and reinsurance premiums are not taxed.

With a few exceptions, the tax rate is 2% of the premiums collected on insurance risks in this State. The tax is prepaid based on the previous year’s premiums, with payments due March 1 and June 1.

Exceptions:

• Group accident and health insurance premiums (1%);
• Ocean marine risks (5% of three-year average of underwriting profits);
• Workers’ compensation premiums (2.25%).

If, for any insurance company, the ratio of Ó£»¨ÊÓƵ business to total business is greater than 12.5%, the tax is imposed on only 12.5% of that company’s total premiums. Another .05% is imposed on group accident and health premiums, and another .1% on all other insurance premiums.

Applicable Laws and Rules

N.J.A.C. 11:2, N.J.S.A. 54:18A-1(b), (c), N.J.S.A. 54:18A-1, N.J.S.A. 54:18A-6, N.J.S.A. 54:18A-2, N.J.S.A. 54:18A-2(c), 54:18A-3(c), P.L. 2009, c 75, N.J.S.A. 54:18A-1(a)