Code of Virginia

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Code of Virginia
Title 58.1. Taxation
Chapter 25. License Tax on Certain Insurance Companies
11/26/2020

Article 2. Estimated Tax.

§ 58.1-2520. Requirement of declaration.

A. Every insurance company and nonstock corporation licensed pursuant to Chapters 42 and 45 of Title 38.2 subject to the state license tax imposed by § 58.1-2501 shall make a declaration of estimated tax if the tax imposed by this chapter, for the license year, measured by direct gross premium income, can reasonably be expected to exceed $3,000.

Such declaration shall contain such pertinent information as the Department may by forms or guidelines prescribe.

B. Any such insurance company or nonstock corporation with a taxable year of less than 12 months shall make a declaration in accordance with guidelines prescribed by the Department.

Code 1950, § 58-502.2; 1968, c. 13; 1978, c. 4; 1984, c. 675; 1987, cc. 565, 655; 2011, c. 850.

§ 58.1-2521. Time for filing declarations of estimated tax.

A. The declaration of estimated tax shall be filed as follows:

If the requirements of subsection A of § 58.1-2520 are first met:

1. Before April 1 of the taxable year, the declaration shall be filed on or before April 15 of the taxable year.

2. After March 31 but before June 1 of the taxable year, the declaration shall be filed on or before June 15 of the taxable year.

3. After May 31, but before September 1 of the taxable year, the declaration shall be filed on or before September 15 of the taxable year.

4. After August 31, but before December 1 of the taxable year, the declaration shall be filed on or before December 15 of the taxable year.

B. The application of this section to taxable years of less than 12 months shall be in accordance with guidelines prescribed by the Department.

Code 1950, § 58-502.3; 1968, c. 13; 1984, c. 675; 2011, c. 850.

§ 58.1-2522. Amendments to declaration.

An amendment of a declaration may be filed in any interval between installment dates prescribed for the taxable year, but only one amendment may be filed in each such interval. Such amendments shall be filed pursuant to guidelines prescribed by the Department.

Code 1950, §§ 58-502.2, 58-502.3; 1968, c. 13; 1978, c. 4; 1984, c. 675; 2011, c. 850.

§ 58.1-2523. Payment of estimated tax.

A. The amount of estimated tax with respect to which a declaration is required under § 58.1-2520 shall be paid in installments as follows:

1. If the declaration is required to be filed by April 15 of the taxable year, twenty-five percent of the estimated tax shall be paid on April, June, September and December 15 of said taxable year.

2. If the declaration is required to be filed by June 15 of the taxable year, one-third of the estimated tax shall be paid on June, September and December 15 of said taxable year.

3. If the declaration is required to be filed by September 15 of the taxable year, one-half of the estimated tax shall be paid on September and December 15 of said taxable year.

4. If the declaration is required to be filed by December 15 of the taxable year, 100 percent of the estimated tax shall be paid on the same date such declaration is filed.

B. If any amendment to a declaration is filed, the amount of any remaining installments shall be the amount which would have been payable if the new estimate had been made when the first estimate for the taxable year was made, increased or decreased, as the case may be, by the amount computed by dividing: (1) The difference between (a) the amount of estimated tax required to be paid before the date on which the amendment is made, and (b) the amount of estimated tax which would have been required to be paid before such date if the new estimate had been made when the first estimate was made, by (2) the number of installments remaining to be paid on or after the date on which the amendment is made.

C. At the election of the insurance company, any installment of the estimated tax may be paid before the date prescribed for its payment.

Code 1950, § 58-502.4; 1968, c. 13; 1972, c. 153; 1984, c. 675.

§ 58.1-2524. Payments are on account of tax for license year.

Payment of the estimated tax or any installment thereof shall be considered payment on account of the license tax imposed by this chapter for the license year.

Code 1950, § 58-502.4; 1968, c. 13; 1972, c. 153; 1984, c. 675.

§ 58.1-2525. Extensions of time.

The Department may grant a reasonable extension of time for payment of estimated tax, or any installment, or for filing any declaration pursuant to this article, on condition that the taxpayer shall pay interest on the amount involved at the rate set forth in § 58.1-15 until the time of payment.

Code 1950, § 58-502.4; 1968, c. 13; 1972, c. 153; 1984, c. 675; 2011, c. 850; 2013, cc. 29, 163.

§ 58.1-2526. Where declarations filed and how payments made; refunding overpayments.

A. Every insurance company required by this article to file a declaration and make payment of the estimated tax shall file and pay the same with the Department. All such payments shall be deposited by the Department into the state treasury.

B. If any insurance company overestimates and overpays estimated tax or overpays as a result of increased regulatory costs imposed pursuant to § 38.2-1026, the Department shall issue a refund of the amount of the overpayment to the taxpayer. The overpayment shall be refunded out of the state treasury. No interest shall be paid on the refund of any overpayment.

Code 1950, § 58-502.5; 1968, c. 13; 1984, c. 675; 1985, c. 221; 1999, c. 571; 2011, c. 850; 2013, cc. 29, 163.

§ 58.1-2527. Failure to pay estimated tax.

A. In case of any underpayment of estimated tax by an insurance company, there shall be added to the tax for the license year interest determined at the rate set forth in § 58.1-15 upon the amount of the underpayment for the period of the underpayment.

B. For purposes of subsection A, the amount of the underpayment shall be the excess of:

1. The amount of the installment which would be required to be paid if the estimated tax were equal to 90 percent of the tax shown on the report for the license year, over

2. The amount, if any, of the installment paid on or before the last date prescribed for payment.

C. The period of the underpayment shall run from the date the installment was required to be paid to whichever of the following dates is the earlier:

1. The first day of the third month following the close of the taxable year.

2. With respect to any portion of the underpayment, the date on which such portion is paid. For purposes of this paragraph, a payment of estimated tax on any installment date shall be considered a payment of any previous underpayment only to the extent such payment exceeds the amount of the installment determined under subdivision B 1 for such installment date.

Code 1950, § 58-502.6; 1968, c. 13; 1984, c. 675; 2013, cc. 29, 163.

§ 58.1-2528. Exception to § 58.1-2527.

A. Notwithstanding the provisions of § 58.1-2527, the addition to the tax with respect to any underpayment of any installment shall not be imposed if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of such installment equals or exceeds the amount which would have been required to be paid on or before such date if the estimated tax were whichever of the following is the lesser:

1. The tax as ascertained for the preceding license year, and the tax for such preceding license year was computed on the basis of a taxable year of 12 months.

2. An amount equal to the tax computed at the rate applicable to the license year but otherwise on the basis of the facts shown on the report of the insurance company for, and the law applicable to, the preceding license year.

3. An amount equal to 90 percent of the tax measured by direct gross premium income received or derived in the taxable year computed by placing on an annualized basis the taxable direct gross premium income:

a. For the first three months of the taxable year, in the case of the installment required to be paid in the fourth month,

b. For the first three months or for the first five months of the taxable year, in the case of the installment required to be paid in the sixth month,

c. For the first six months or for the first eight months of the taxable year, in the case of the installment required to be paid in the ninth month, and

d. For the first nine months or for the first 11 months of the taxable year, in the case of the installment required to be paid in the twelfth month of the taxable year.

B. For purposes of subdivision A 3, the taxable direct gross premium income shall be placed on an annualized basis by multiplying by twelve the taxable direct gross premium income referred to in subdivision A 3, and dividing the resulting amount by the number of months in the taxable year (three, five, six, eight, nine, or 11, as the case may be) referred to in subdivision A 3.

C. The application of this section to taxable years of less than 12 months shall be in accordance with guidelines prescribed by the Department.

Code 1950, § 58-502.6; 1968, c. 13; 1984, c. 675; 2011, c. 850.

§ 58.1-2529. Other provisions of this chapter not affected by this article; insurance companies going out of business.

Nothing in this article shall be construed as affecting other provisions of this chapter except to the extent required to give this article full effect. If an insurance company goes out of business or ceases to be an insurance company in this Commonwealth in any taxable or license year, such an event shall not relieve the company of the payment of the tax measured by direct gross premium income for the period in which the company operated as an insurance company and received or derived direct gross premium income from business in this Commonwealth.

Code 1950, § 58-502.7; 1968, c. 13; 1984, c. 675.

§ 58.1-2530. Double taxation respecting same direct gross premium income negated.

This chapter shall not be construed as requiring the inclusion in the base for measuring the tax imposed by this chapter for any year any direct gross premium income which had been previously included in the base for measuring the tax imposed by this chapter respecting any license year or part thereof, and the tax paid thereon.

Code 1950, § 58-502.9; 1968, c. 13; 1984, c. 675.

§ 58.1-2531. Distribution of certain revenue.

A. Beginning with the Commonwealth's fiscal year beginning on July 1, 2008 and for each fiscal year thereafter, an amount equal to one-third of all revenues collected by the Department in the most recently ended fiscal year from the tax imposed under this chapter, less one-third of the total amount of such tax refunded in the most recently ended fiscal year, shall be deposited by the Comptroller to the Commonwealth Transportation Fund established under § 33.2-1524.

B. For purposes of the Comptroller's deposits under this section, the Tax Commissioner shall, no later than July 15 of each year, provide a written certification to the Comptroller that reports the amount to be deposited pursuant to subsection A. After the required amount has been deposited as provided in subsection A, all remaining revenues from the tax imposed under this chapter shall be deposited into the general fund of the state treasury. The Comptroller shall make all deposits under this section as soon as practicable.

2007, c. 896; 2011, c. 850; 2020, cc. 1230, 1275.

§ 58.1-2532. Exchange of information.

The Department and the Commission may exchange information for purposes of enforcing the provisions of this title.

2011, c. 850.

§ 58.1-2533. Reimbursement for certain costs.

Any costs related to the insurance premiums tax that are incurred by the Department shall be recovered from the assessment for expenses under §§ 38.2-400 and 38.2-403.

2011, c. 850.