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Line Instructions

Line 10 — Initiative Credit. A company shall be allowed a credit

against the premium tax equal to 1.5 percent of such company’s total

Federal Audit

capital contribution in excess of their full proportionate share which shall

If your corporation has undergone a federal audit for some prior year,

mean an investment in the Massachusetts Property and Casualty In-

you must report any changes on Massachusetts Form CA-6, Applica-

surance Company Community and Economic Development Initiative.

tion for Abatement/Amended Return, within three months after the

final determination of the correct taxable income by the IRS. Other-

This credit is effective for tax years in which the aggregate cumulative

wise, you will be subject to a penalty. Answering “yes” to this question

investment in the Property and Casualty Initiative reaches 100 million

does not relieve the company of this filing obligation.

or the tax year 2004, whichever is later.

Should the Whole Dollar Method Be Used?

Line 11 — Credit for Member Insurers of the Massachusetts Life

Yes. All amounts entered must be rounded off to the nearest dollar.

and Health Insurance Guaranty Association. Enter 10% of the as-

sessment for each of five years following the year in which the as-

Computation of Excise

sessment was paid. If the sum of offsets exceeds $3,000,000, the

—

Line 1

Income. Enter the amount of total net direct premiums

excess may be carried forward and may be used in a year in which

subject to tax in Massachusetts from Schedule T of the NAIC Annual

the $3,000,000 is not exceeded. If the total offsets exceed $3,000,000

Statement. Include in this amount any finance and service charges

in a year, the Department of Revenue will assess each member with

from Schedule T.

an additional tax equal to the amount of the offset which exceeds

Please note that ocean marine premiums reported on your 2001

$3,000,000 of such members pro rata share. If the total offsets do not

Ocean Marine Profits Tax Return, line 33, column 7, are deductible

exceed $3,000,000 in a year, the Department of Revenue will calculate

from net direct premiums.

each members’ pro rata share to determine the amount of refund due

each member and issue a refund to each member.

Net Direct Premiums are gross premiums, exclusive of reinsurance

assumed, as written in:

Line 12 — Economic Opportunity Area Credit. Enter the amount

of Economic Opportunity Area credit claimed this year from Schedule

• all policies issued or renewed (including dividends applied to pay-

EOA, line 10. Attach a completed Schedule EOA to this return. For

ment of renewals, and policy and membership fees whether or not

more information, contact the Massachusetts Office of Business De-

actually received by the company);

velopment at One Ashburton Place, Room 2101, Boston, MA 02108.

• all additional premiums charged on policies issued in this or in pre-

Line 13 — Full Employment Program Credit. A qualified employer

vious years; and

participarting in the Full Employment Program may claim a credit of

• all assessments made upon policyholders, for insurance of property

$100 per month of eligible employment per employee. The maximum

or interests in Massachusetts or which are subjects of insurance is-

amount of credit that may be applied in all taxable years with respect

sued through companies or agents in this State;

to each employee is $1,200. Attach Schedule FEC to this return. For

more information, contact the Department of Transitional Assistance,

Less:

600 Washington Street, Boston, MA 02111.

• premiums on direct policies written but not taken or canceled through

default of payment; and

Line 15 — Voluntary Contribution for Endangered Wildlife Con-

servation. Any corporation that wishes to contribute any amount to the

• premiums returned to policyholders on canceled policies of direct

Natural Heritage and Endangered Species Fund may do so on this

insurance, but without deduction or exclusion in any manner of rein-

form. This amount is added to the excise due. It increases the amount

surance ceded, dividends, commissions, expenses or losses.

of the corporation’s payment or reduces the amount of its refund.

Line 2. If applicable and not previously reported on Schedule T, in-

The Natural Heritage and Endangered Species Fund is administered

clude the policy year amount of “Fair Plan” participation premiums in-

by the Department of Fisheries, Wildlife and Environmental Law En-

curred with the Massachusetts Property Tax Insurance Underwriting

forcement to provide for conservation programs for rare, endangered

Association and/or Crime Insurance Program.

and nongame wildlife and plants in the Commonwealth.

Line 4 — Deduction. Enter the total of dividend deductions for

Lines 17 through 20 — Payments. Enter in line 17 any overpayment

premiums returned or credited to policyholders in Mass. as dividends

credited from 2000 to 2001. Enter estimated tax payments made in

on direct business from Schedule T of the NAIC Annual Statement.

2001 in line 18. Any extension payment should be entered in line 19.

Line 7 — Retaliatory Tax. Use the back of Form 63-23 to calculate

Line 19 should reflect the total payments made for the entire year.

your excise using the same method and rate used by the state in

Lines 21 through 23 — Overpayment and Refund. If the amount

which you are incorporated and would be imposed on a like Mass-

in line 19 is larger than the amount in line 15, enter the amount over-

achusetts insurance company, or its agents, if doing business to the

paid in line 21.

same extent. If the computation in the state of your incorporation is

in every respect the same as your Massachusetts computation, a

The overpayment may be applied in part or in full to 2002 estimated

statement to that effect should be made. Enter this amount in line 7.

taxes by entering in line 22 the amount to be credited to 2002 esti-

Retaliatory tax provisions are provided under MGL Ch. 63, secs. 23

mated tax payments. Enter the amount to be refunded in line 22.

and 24A.

An overpayment of excise cannot be applied as a credit to the tax of

Line 8 — Credit Recapture. If the corporation is required to recap-

another account of this company or to the tax of another company.

ture any amount of previously claimed EOA Credit, complete Sched-

Line 23 — Balance Due. If line 16 is larger than line 20, enter

ule H-2 and enter the result in line 8 of the return. Current year credits

the balance due in line 24. Payment in full is due on or before March

can then be used to offset the total excise due which will include the

15, 2002.

recapture amount.

Form 63-23 - Premium Excise Return For All Classes Of Foreign Insurance Companies - 2001 Page 4

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