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Form 63-23 Instructions

Who Must File Form 63-23?

When Are Estimated Tax Payments Required?

All classes of foreign insurance companies subject to MGL Ch. 63,

Any insurance company which reasonably estimates its excise to be

Secs. 23 and 24A must file Form 63-23. Life insurance companies

in excess of $1,000 for the taxable year is required to make estimated

that are taxable under MGL, Ch. 63, Sec. 20, 21 or 23 and marine

tax payments to the Commonwealth. Estimated taxes may be paid in

business companies taxable under MGL Ch. 63, Sec. 29A are not re-

full on or before the 15th day of the third month of the company’s tax-

quired to file this form.

able year or in four installment payments according to the schedule

below. Insurance companies making estimated payments must use

A foreign company is any company organized or formed in any state

Form 355-ES to make their payments.

or country other than Massachusetts.

For taxable years ending on or after December 31, 1989, estimated

When Must Form 63-23 Be Filed?

tax installments are paid as follows:

Form 63-23, together with payment in full of any tax due, must be

% of

filed on or before the 15th day of the third month after the close of the

estimated

Due date from start

company’s taxable year.

Installment no.

tax due

of taxable year

May an Insurance Company Obtain an Extension

40%

15th day of 3rd month

of Time to File?

25%

15th day of 6th month

Yes. Form 63-23 filers may request a six-month extension of time to

25%

15th day of 9th month

file by submitting Massachusetts Form 355-7004 Misc. on or before

10%

15th day of 12th month

the original due date. Any tax due at the time of filing Form 355-7004

Misc. must be paid in full.

Note: New corporations in their first full taxable year with less than 10

employees have different estimated payment percentages — 30%,

Note: An extension of time to file is not valid if the company fails to

25%, 25% and 20% respectively.

pay at least 50% of the total tax liability through estimated payments

Special Optical Character Readable payment vouchers are mailed to

or using Form 355-7004 Misc.

all companies that have made estimated payments or should be mak-

What Are the Penalties for Late Returns?

ing estimated payments. These special forms are easier to fill out and

Insurance excise returns that are not filed on or before the due date

facilitate processing.

are subject to interest and penalty charges. The penalty for failure to

¹ ₂% of the balance due per

Insurance companies that underpay, or fail to pay, their estimated

pay the total amount due with this form is

taxes may incur an additional penalty on the amount of the underpay-

month (or fraction thereof), up to a maximum of 25%. A late payment

ment for the period of the underpayment. Form M-2220, Underpay-

penalty does not apply to amended returns when the amount shown

ment of Massachusetts Estimated Tax by Corporations, is used to

on the original return was paid.

compute the additional charge.

The penalty for failure to file a return by the due date is 1% of the bal-

Any corporation having $1 million or more of federal taxable income

ance due per month (or fraction thereof), up to a maximum of 25%.

in any of its three preceding taxable years (as defined in Section 6655

Any tax not paid on or before the due date — without regard to the

(g) of the IRC) may only use its prior year’s tax liability to calculate its

extension — is subject to interest.

first quarterly estimated tax payment. Any reduction in the first install-

ment payment that results from using this method must be added to

What Is a Valid Return?

the second installment payment.

A valid return is one upon which all required amounts have been en-

tered for all of the appropriate items on the form. Applicable forms

A company that claims the exception to the underpayment penalty of

and documents may be attached to explain these amounts. Refer-

equaling the prior year’s tax liability must provide federal tax re-

encing items to attachments instead of properly entering all amounts

turns (one page only) for the three preceding taxable years to verify

onto the return is not sufficient. The return must be signed by either

that federal taxable income is less than $1 million.

the treasurer or assistant treasurer of the company.

Note: Any insurance company required to file more than one type of

To be valid, a Form 63-23 must also include the following:

excise return must also file separate estimated tax payment vouchers

since each type of tax is governed by a different section of the Mass-

• a copy of Schedule T, Exhibit of Premiums Written from the NAIC

achusetts General Laws.

Annual Statement; and

For more information on corporate estimated taxes, refer to MGL,

• a statement from those companies who are members of the Mass-

Chapter 63B.

achusetts Property Insurance Underwriting Association (Fair Plan)

and/or Crime Insurance Program — the statements must indicate

How Is the Excise Determined?

the amounts disbursed, the percentage of participation, the policy

Foreign insurance companies are taxed on gross premiums written

year and whether the premiums associated with the disbursement

or renewed, and finance charges imposed on those premiums in

were included on Schedule T of the NAIC Annual Statement.

Massachusetts.

Reproduction of returns must be approved by DOR prior to filing and

Are Combined Returns Allowed?

meet the criteria provided in Technical Information Release 95-8.

No. Foreign Insurance companies are not allowed to participate in fil-

ing combined returns.

Failure to meet any of the requirements detailed in this section may

result in a penalty for filing an insufficient return. Such a penalty may

be assessed at double the amount of the tax due.

Form 63-23 - Premium Excise Return For All Classes Of Foreign Insurance Companies - 2001 Page 3

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