Senate File 2397 - Introduced SENATE FILE 2397 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 3002) A BILL FOR An Act relating to the taxation of captive companies, and 1 including effective date provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5285SV (3) 90 nls/ko

S.F. 2397 Section 1. Section 432.1A, subsection 2, paragraph c, Code 1 2024, is amended to read as follows: 2 c. The amount of reinsurance tax due from a captive company 3 under paragraph “a” shall be calculated as follows: 4 (1) Two-tenths Two hundred thousandths of one percent on the 5 first twenty million dollars of assumed reinsurance premiums 6 written . 7 (2) One-eighth One hundred twenty-five thousandths of one 8 percent on the twenty million dollars of assumed reinsurance 9 premiums collected written after the first twenty million 10 dollars of assumed reinsurance premiums collected written under 11 subparagraph (1). 12 (3) Five Forty-five thousandths of one percent on each 13 dollar the twenty million dollars of assumed reinsurance 14 premiums collected written after the twenty million dollars 15 collected written under subparagraph (1) and the twenty million 16 dollars collected written under subparagraph (2). 17 (4) Twenty thousandths of one percent of each dollar of 18 assumed reinsurance premiums written after the twenty million 19 dollars written under subparagraph (1), the twenty million 20 dollars written under subparagraph (2), and the twenty million 21 dollars written under subparagraph (3). 22 Sec. 2. EFFECTIVE DATE. This Act, being deemed of immediate 23 importance, takes effect upon enactment. 24 EXPLANATION 25 The inclusion of this explanation does not constitute agreement with 26 the explanation’s substance by the members of the general assembly. 27 This bill relates to the calculation of the amount of 28 reinsurance tax (tax) due from a captive company. 29 The bill changes the amount of tax due from a captive 30 company on the first $20 million of assumed reinsurance 31 premiums written from two-tenths of 1 percent to two hundred 32 thousandths of 1 percent; the amount of tax due on the $20 33 million of assumed reinsurance premiums written after the first 34 $20 million of assumed reinsurance premiums are written from 35 -1- LSB 5285SV (3) 90 nls/ko 1/ 2

S.F. 2397 one-eighth of 1 percent to one hundred twenty-five thousandths 1 of 1 percent; and the amount of tax due on each dollar of 2 assumed reinsurance premiums written after the first $40 3 million of assumed reinsurance premiums from 5 percent on each 4 dollar to forty-five thousandths of 1 percent. 5 The bill creates a new tier of reinsurance tax due on each 6 dollar of assumed reinsurance premiums written after the first 7 $60 million of assumed reinsurance premiums written in the 8 amount of twenty thousandths of 1 percent of each dollar. 9 The bill takes effect upon enactment. 10 -2- LSB 5285SV (3) 90 nls/ko 2/ 2