26 U.S.C. § 4371 — Imposition of tax

Page 2968 TITLE 26—INTERNAL REVENUE CODE § 4371 A prior section 4332, acts Aug. 16, 1954, ch. 736, 68A Stat. 516; Jan. 28, 1956, ch. 19, 70 Stat. 9; Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1296, granted ex- emptions in the case of transfers and sales by brokers and installment purchases of obligations and made ref- erence to other exemptions listed in other sections. A prior section 4333, acts Aug. 16, 1954, ch. 736, 68A Stat. 516; Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1296, made cross references to other sections and subtitles for definitions, penalties, and other general and administrative provisions. A prior section 4341, acts Aug. 16, 1954, ch. 736, 68A Stat. 517; Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1297, granted an exemption from the imposition of the tax under sections 4321 and 4331 in the case of trans- fers as collateral security and as security for perform- ance. A prior section 4342, acts Aug. 16, 1954, ch. 736, 68A Stat. 517; Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1297, granted exemptions in the case of delivery or transfer of instruments by a fiduciary to his nominee or between nominees or by a custodian. A prior section 4343, acts Aug. 16, 1954, ch. 736, 68A Stat. 517; Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1297, provided that taxes imposed by sections 4321 and 4331 would not apply in specified cases involving decedents, minors, incompetents, financial institu- tions, bankrupts, successors, foreign governments and aliens, trustees, and survivors. A prior section 4344, Pub. L. 85–859, title I, § 141(a), Sept. 2, 1958, 72 Stat. 1298, made provision for an exemp- tion from tax in the case of specified loan transactions, worthless stock and obligations, and transfers between certain revocable trusts. A prior section 4345, acts Aug. 16, 1954, ch. 736, 68A Stat. 518, § 4345, formerly § 4344; renumbered § 4345 and amended Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1298, required an exemption certificate setting forth the facts as prescribed by regulations. A prior section 4346, acts Aug. 16, 1954, ch. 736, 68A Stat. 518, § 4346, formerly § 4345; renumbered § 4346, Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1298, made cross reference to other sections for additional exemp- tions. A prior section 4351, acts Aug. 16, 1954, ch. 736, 68A Stat. 518; Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1299, defined registered nominee and sale or trans- fer. A prior section 4352, acts Aug. 16, 1954, ch. 736, 68A Stat. 519, § 4352, formerly § 4353; renumbered § 4352, Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1299, pro- vided for the affixing of the stamps required either on the instrument itself or on the memorandum or bill of sale. A prior section 4353, Pub. L. 85–859, title I, § 141(a), Sept. 2, 1958, 72 Stat. 1299, made provision for the pay- ment of tax through the national securities exchanges without the use of stamps. A prior section 4354, acts Aug. 16, 1954, ch. 736, 68A Stat. 519; Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1299, made cross references to section 4384 and subtitle F for penalties and other general and adminis- trative provisions. A prior section 4361, acts Aug. 16, 1954, ch. 736, 68A Stat. 520; Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1299; June 21, 1965, Pub. L. 89–44, title IV, § 401(b), 79 Stat. 148, related to the imposition of a tax on each deed, instrument, or writing by which any realty is sold, assigned, transferred, or otherwise conveyed. A prior section 4362, acts Aug. 16, 1954, ch. 736, 68A Stat. 520; Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1300, related to exemptions to the tax imposed by former section 4361. A prior section 4363, acts Aug. 16, 1954, ch. 736, 68A Stat. 520; Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1300, related to cross references to former section 4384 and subtitle F of this title. A prior section 4375, acts Aug. 16, 1954, ch. 736, 68A Stat. 522; Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1301, made cross-references to section 4384 and subtitle F. A prior section 4381, acts Aug. 16, 1954, ch. 736, 68A Stat. 523, Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1302, defined certificates of indebtedness, corpora- tion, and shares or certificates of stock. A prior section 4382, acts Aug. 16, 1954, ch. 736, 68A Stat. 523; Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1302; Oct. 16, 1962, Pub. L. 87–834, § 6(e)(2), 76 Stat. 984, granted exemptions to Government and state obli- gations, etc. A prior section 4383, Pub. L. 85–859, title I, 141(a), Sept. 2, 1958, 72 Stat. 1303, related to the taxation of continuing and terminated partnerships. A prior section 4384, acts Aug. 16, 1954, ch. 736, 68A Stat. 524, § 4384, formerly § 4383; renumbered § 4384 and amended Sept. 2, 1958, Pub. L. 85–859, title I, § 141(a), 72 Stat. 1303, related to liability for the tax. AMENDMENTS 2010—Pub. L. 111–148, title VI, § 6301(e)(2)(B)(i), Mar. 23, 2010, 124 Stat. 746, substituted ‘‘TAXES ON CER- TAIN INSURANCE POLICIES’’ for ‘‘POLICIES ISSUED BY FOREIGN INSURERS’’ as chapter heading and added items relating to subchapters A and B. 1976—Pub. L. 94–455, title XIX, § 1904(a)(12), Oct. 4, 1976, 90 Stat. 1812, substituted ‘‘POLICIES ISSUED BY FOREIGN INSURERS’’ for ‘‘DOCUMENTARY STAMP TAXES’’ as chapter heading and struck out items re- lating to subchapters C to E. 1965—Pub. L. 89–44, title IV, § 401(a), June 21, 1965, 79 Stat. 148, struck out items relating to subchapters A and B. Statutory Notes and Related Subsidiaries EFFECTIVE DATES OF REPEAL Pub. L. 89–44, title VII, § 701(c)(1), June 21, 1965, 79 Stat. 157, provided that: ‘‘The amendments made by section 401 [repealing sections 4301 to 4305, 4311 to 4315, 4321 to 4324, 4331 to 4333, 4341 to 4346, 4351 to 4354 and 4381 of this title] (relating to documentary stamp taxes) shall apply on and after January 1, 1966.’’ Repeal of sections 4361 to 4363, 4375, 4382 to 4384 by section 1904(a)(12) of 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 an Effective Date of 1976 Amendment note under sec- tion 4041 of this title. Subchapter A—Policies Issued By Foreign Insurers Sec. 4371. Imposition of tax. 4372. Definitions. 4373. Exemptions. 4374. Liability for tax. Editorial Notes AMENDMENTS 2010—Pub. L. 111–148, title VI, § 6301(e)(2)(B)(i), Mar. 23, 2010, 124 Stat. 746, added subchapter heading. § 4371. Imposition of tax There is hereby imposed, on each policy of in- surance, indemnity bond, annuity contract, or policy of reinsurance issued by any foreign in- surer or reinsurer, a tax at the following rates: (1) Casualty insurance and indemnity bonds 4 cents on each dollar, or fractional part thereof, of the premium paid on the policy of casualty insurance or the indemnity bond, if issued to or for, or in the name of, an insured as defined in section 4372(d); (2) Life insurance, sickness, and accident poli- cies, and annuity contracts 1 cent on each dollar, or fractional part thereof, of the premium paid on the policy of Page 2969 TITLE 26—INTERNAL REVENUE CODE § 4372 life, sickness, or accident insurance, or annu- ity contract; and (3) Reinsurance 1 cent on each dollar, or fractional part thereof, of the premium paid on the policy of reinsurance covering any of the contracts tax- able under paragraph (1) or (2). (Aug. 16, 1954, ch. 736, 68A Stat. 521; Mar. 13, 1956, ch. 83, § 5(9), 70 Stat. 49; Pub. L. 85–859, title I, § 141(a), Sept. 2, 1958, 72 Stat. 1300; Pub. L. 86–69, § 3(f)(3), June 25, 1959, 73 Stat. 140; Pub. L. 89–44, title VIII, § 804(b), June 21, 1965, 79 Stat. 160; Pub. L. 94–455, title XIX, § 1904(a)(12), Oct. 4, 1976, 90 Stat. 1812; Pub. L. 98–369, div. A, title II, § 211(b)(23), July 18, 1984, 98 Stat. 757; Pub. L. 100–203, title X, § 10242(c)(3), Dec. 22, 1987, 101 Stat. 1330–423; Pub. L. 101–239, title VII, § 7811(i)(11), Dec. 19, 1989, 103 Stat. 2411.) Editorial Notes AMENDMENTS 1989—Par. (2). Pub. L. 101–239 struck out ‘‘, unless the insurer is subject to tax under section 842(b)’’ after ‘‘or annuity contract’’. 1987—Par. (2). Pub. L. 100–203 substituted ‘‘section 842(b)’’ for ‘‘section 813’’. 1984—Par. (2). Pub. L. 98–369 substituted ‘‘section 813’’ for ‘‘section 819’’. 1976—Pub. L. 94–455 substituted in par. (1) ‘‘4 cents’’ for ‘‘four cents’’ and ‘‘premium paid’’ for ‘‘premium charged’’, in pars. (2) and (3) ‘‘1 cent’’ for ‘‘one cent’’ and ‘‘premium paid’’ for ‘‘premium charged’’, and struck out provision following par. (3) relating to com- putation of tax on premium paid in lieu of premium charged. 1965—Pub. L. 89–44 inserted last sentence relating to computation of tax on premium paid in lieu of pre- mium charged. 1959—Par. (2). Pub. L. 86–69 substituted ‘‘section 819’’ for ‘‘section 816’’. 1958—Pub. L. 85–859 substituted ‘‘is hereby imposed, on each policy of insurance, indemnity bond, annuity contract, or policy of reinsurance issued by any foreign insurer or reinsurer, a tax’’ for ‘‘shall be imposed a tax on each policy of insurance, indemnity bond, annuity contract, or policy of reinsurance issued by any foreign insurer or reinsurer’’. 1956—Par. (2). Act Mar. 13, 1956, substituted ‘‘section 816’’ for ‘‘section 807’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1989 AMENDMENT Amendment by Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100–647, to which such amendment relates, see section 7817 of Pub. L. 101–239, set out as a note under section 1 of this title. EFFECTIVE DATE OF 1987 AMENDMENT Amendment by Pub. L. 100–203 applicable to taxable years beginning after Dec. 31, 1987, see section 10242(d) of Pub. L. 100–203, set out as a note under section 816 of this title. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–369 applicable to taxable years beginning after Dec. 31, 1983, see section 215 of Pub. L. 98–369, set out as an Effective Date note under section 801 of this title. 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 Amendment by Pub. L. 89–44 applicable with respect to policies, bonds, and contracts with respect to which the tax imposed by this section is required to be paid on the basis of a return, see section 804(c) of Pub. L. 89–44, set out as a note under section 4374 of this title. EFFECTIVE DATE OF 1959 AMENDMENT Amendment by Pub. L. 86–69 applicable only with re- spect to taxable years beginning after Dec. 31, 1957, see section 4 of Pub. L. 86–69, set out as an Effective Date note under section 381 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. EFFECTIVE DATE OF 1956 AMENDMENT Amendment by act Mar. 13, 1956, applicable only to taxable years beginning after Dec. 31, 1954, see section 6 of act Mar. 13, 1956, set out as a note under section 316 of this title. § 4372. Definitions (a) Foreign insurer or reinsurer For purposes of section 4371, the term ‘‘foreign insurer or reinsurer’’ means an insurer or rein- surer who is a nonresident alien individual, or a foreign partnership, or a foreign corporation. The term includes a nonresident alien indi- vidual, foreign partnership, or foreign corpora- tion which shall become bound by an obligation of the nature of an indemnity bond. The term does not include a foreign government, or mu- nicipal or other corporation exercising the tax- ing power. (b) Policy of casualty insurance For purposes of section 4371(1), the term ‘‘pol- icy of casualty insurance’’ means any policy (other than life) or other instrument by what- ever name called whereby a contract of insur- ance is made, continued, or renewed. (c) Indemnity bond For purposes of this chapter, the term ‘‘indem- nity bond’’ means any instrument by whatever name called whereby an obligation of the nature of an indemnity, fidelity, or surety bond is made, continued, or renewed. The term includes any bond for indemnifying any person who shall have become bound or engaged as surety, and any bond for the due execution or performance of any contract, obligation, or requirement, or the duties of any office or position, and to ac- count for money received by virtue thereof, where a premium is charged for the execution of such bond. (d) Insured For purposes of section 4371(1), the term ‘‘in- sured’’ means— (1) a domestic corporation or partnership, or an individual resident of the United States, against, or with respect to, hazards, risks, losses, or liabilities wholly or partly within the United States, or (2) a foreign corporation, foreign partner- ship, or nonresident individual, engaged in a