26 U.S.C. § 4374 — Liability for tax

Page 2970 TITLE 26—INTERNAL REVENUE CODE § 4373 trade or business within the United States, against, or with respect to, hazards, risks, losses, or liabilities within the United States. (e) Policy of life, sickness, or accident insurance, or annuity contract For the purpose of section 4371(2), the term ‘‘policy of life, sickness, or accident insurance, or annuity contract’’ means any policy or other instrument by whatever name called whereby a contract of insurance or an annuity contract is made, continued, or renewed with respect to the life or hazards to the person of a citizen or resi- dent of the United States. (f) Policy of reinsurance For the purpose of section 4371(3), the term ‘‘policy of reinsurance’’ means any policy or other instrument by whatever name called whereby a contract of reinsurance is made, con- tinued, or renewed against, or with respect to, any of the hazards, risks, losses, or liabilities covered by contracts taxable under paragraph (1) or (2) of section 4371. (Aug. 16, 1954, ch. 736, 68A Stat. 521; Pub. L. 85–859, title I, § 141(a), Sept. 2, 1958, 72 Stat. 1300; Pub. L. 94–455, title XIX, § 1904(a)(12), Oct. 4, 1976, 90 Stat. 1812.) Editorial Notes AMENDMENTS 1976—Subsec. (a). Pub. L. 94–455 substituted ‘‘section 4371’’ for ‘‘this subchapter’’, and inserted provision that term does not include a foreign government, or munic- ipal or other corporation exercising the taxing power. Subsec. (c). Pub. L. 94–455 substituted ‘‘this chapter’’ for ‘‘this subchapter’’. 1958—Subsec. (d)(2). Pub. L. 85–859 substituted ‘‘against, or with respect to, hazards, risks, losses, or liabilities’’ for ‘‘with respect to hazards, risks, or liabil- ities’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1976 AMENDMENT Amendment by Pub. L. 94–455 effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1904(d) of Pub. L. 94–455, set out as a note under section 4041 of this title. EFFECTIVE DATE OF 1958 AMENDMENT Amendment by Pub. L. 85–859 effective on first day of first calendar quarter which begins more than 60 days after Sept. 2, 1958, see section 1(c) of Pub. L. 85–859, Sept. 2, 1958, 72 Stat. 1275. § 4373. Exemptions The tax imposed by section 4371 shall not apply to— (1) Effectively connected items Any amount which is effectively connected with the conduct of a trade or business within the United States unless such amount is ex- empt from the application of section 882(a) pursuant to a treaty obligation of the United States. (2) Indemnity bond Any indemnity bond required to be filed by any person to secure payment of any pension, allowance, allotment, relief, or insurance by the United States, or to secure a duplicate for, or the payment of, any bond, note, certificate of indebtedness, war-saving certificate, war- rant or check, issued by the United States. (Aug. 16, 1954, ch. 736, 68A Stat. 522; Pub. L. 85–859, title I, § 141(a), Sept. 2, 1958, 72 Stat. 1301; Pub. L. 94–455, title XIX, § 1904(a)(12), Oct. 4, 1976, 90 Stat. 1813; Pub. L. 100–647, title I, § 1012(q)(13)(A), Nov. 10, 1988, 102 Stat. 3525.) Editorial Notes AMENDMENTS 1988—Par. (1). Pub. L. 100–647 amended par. (1) gen- erally, substituting provisions relating to effectively connected items for provisions relating to domestic agent. 1976—Par. (1). Pub. L. 94–455 substituted ‘‘State, or in the District of Columbia, within’’ for ‘‘State, Territory, or District of the United States within’’. 1958—Pub. L. 85–859 reenacted section without change. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1988 AMENDMENT Pub. L. 100–647, title I, § 1012(q)(13)(B), Nov. 10, 1988, 102 Stat. 3525, provided that: ‘‘The amendment made by subparagraph (A) [amending this section] shall apply with respect to premiums paid after the date 30 days after the date of the enactment of this Act [Nov. 10, 1988].’’ EFFECTIVE DATE OF 1976 AMENDMENT Amendment by Pub. L. 94–455 effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1904(d) of Pub. L. 94–455, set out as a note under section 4041 of this title. § 4374. Liability for tax The tax imposed by this chapter shall be paid, on the basis of a return, by any person who makes, signs, issues, or sells any of the docu- ments and instruments subject to the tax, or for whose use or benefit the same are made, signed, issued, or sold. The United States or any agency or instrumentality thereof shall not be liable for the tax. (Aug. 16, 1954, ch. 736, 68A Stat. 522; Pub. L. 85–859, title I, § 141(a), Sept. 2, 1958, 72 Stat. 1301; Pub. L. 89–44, title VIII, § 804(a)(1), (2), June 21, 1965, 79 Stat. 160; Pub. L. 94–455, title XIX, § 1904(a)(12), Oct. 4, 1976, 90 Stat. 1813.) Editorial Notes PRIOR PROVISIONS For provisions of prior sections 4375, 4381 to 4384, see Prior Provisions note preceding section 4371 of this title. AMENDMENTS 1976—Pub. L. 94–455 substituted in section catchline ‘‘Liability for tax’’ for ‘‘Payment of tax’’ and in text provisions relating to payment of tax on basis of a re- turn and to tax-exempt status of United States and its agencies and instrumentalities for provisions relating to placing of stamps on any policy, indemnity bond, or annuity contract referred to in section 4371 and to reg- ulation by Secretary that tax be paid on basis of a re- turn. 1965—Pub. L. 89–44 substituted ‘‘Payment of tax’’ for ‘‘Affixing of stamps’’ in section catchline, and inserted sentence authorizing Secretary or his delegate to pro- vide by regulation for payment on basis of a return of tax imposed by section 4371. Page 2971 TITLE 26—INTERNAL REVENUE CODE § 4376 1958—Pub. L. 85–859 reenacted section without change. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1976 AMENDMENT Amendment by Pub. L. 94–455 effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1904(d) of Pub. L. 94–455, set out as a note under section 4041 of this title. EFFECTIVE DATE OF 1965 AMENDMENT Pub. L. 89–44, title VIII, § 804(c), June 21, 1965, 79 Stat. 160, provided that: ‘‘The amendments made by sub- section (a) [amending this section] shall take effect on July 1, 1965. The amendments made by subsection (b) [amending section 4371 of this title] shall apply with re- spect to policies, bonds, and contracts with respect to which the tax imposed by section 4371 of the Code is re- quired to be paid on the basis of a return.’’ DETERMINATION OF PARTNERSHIP AS CONTINUING OR TERMINATED PARTNERSHIP Pub. L. 85–859, title I, § 141(b), Sept. 2, 1958, 72 Stat. 1304, mandated that only changes in the partnership oc- curring on or after the effective date specified in sec- tion 1(c) of Pub. L. 85–859 shall be taken into account in the determination of whether a partnership is a con- tinuing or terminated one. Subchapter B—Insured and Self-Insured Health Plans Sec. 4375. Health insurance. 4376. Self-insured health plans. 4377. Definitions and special rules. § 4375. Health insurance (a) Imposition of fee There is hereby imposed on each specified health insurance policy for each policy year end- ing after September 30, 2012, a fee equal to the product of $2 ($1 in the case of policy years end- ing during fiscal year 2013) multiplied by the av- erage number of lives covered under the policy. (b) Liability for fee The fee imposed by subsection (a) shall be paid by the issuer of the policy. (c) Specified health insurance policy For purposes of this section: (1) In general Except as otherwise provided in this section, the term ‘‘specified health insurance policy’’ means any accident or health insurance policy (including a policy under a group health plan) issued with respect to individuals residing in the United States. (2) Exemption for certain policies The term ‘‘specified health insurance pol- icy’’ does not include any insurance if substan- tially all of its coverage is of excepted benefits described in section 9832(c). (3) Treatment of prepaid health coverage ar- rangements (A) In general In the case of any arrangement described in subparagraph (B), such arrangement shall be treated as a specified health insurance policy, and the person referred to in such subparagraph shall be treated as the issuer. (B) Description of arrangements An arrangement is described in this sub- paragraph if under such arrangement fixed payments or premiums are received as con- sideration for any person’s agreement to provide or arrange for the provision of acci- dent or health coverage to residents of the United States, regardless of how such cov- erage is provided or arranged to be provided. (d) Adjustments for increases in health care spending In the case of any policy year ending in any fiscal year beginning after September 30, 2014, the dollar amount in effect under subsection (a) for such policy year shall be equal to the sum of such dollar amount for policy years ending in the previous fiscal year (determined after the application of this subsection), plus an amount equal to the product of— (1) such dollar amount for policy years end- ing in the previous fiscal year, multiplied by (2) the percentage increase in the projected per capita amount of National Health Expend- itures, as most recently published by the Sec- retary before the beginning of the fiscal year. (e) Termination This section shall not apply to policy years ending after September 30, 2029. (Added Pub. L. 111–148, title VI, § 6301(e)(2)(A), Mar. 23, 2010, 124 Stat. 743; amended Pub. L. 116–94, div. N, title I, § 104(b), Dec. 20, 2019, 133 Stat. 3098.) Editorial Notes AMENDMENTS 2019—Subsec. (e). Pub. L. 116–94 substituted ‘‘2029’’ for ‘‘2019’’. § 4376. Self-insured health plans (a) Imposition of fee In the case of any applicable self-insured health plan for each plan year ending after Sep- tember 30, 2012, there is hereby imposed a fee equal to $2 ($1 in the case of plan years ending during fiscal year 2013) multiplied by the aver- age number of lives covered under the plan. (b) Liability for fee (1) In general The fee imposed by subsection (a) shall be paid by the plan sponsor. (2) Plan sponsor For purposes of paragraph (1) the term ‘‘plan sponsor’’ means— (A) the employer in the case of a plan es- tablished or maintained by a single em- ployer, (B) the employee organization in the case of a plan established or maintained by an employee organization, (C) in the case of— (i) a plan established or maintained by 2 or more employers or jointly by 1 or more employers and 1 or more employee organi- zations, (ii) a multiple employer welfare arrange- ment, or