                                 CODE OF VIRGINIA

TAX CREDIT FOR RETALIATORY COSTS PAID TO OTHER STATES (§ 58.1-2510)

A. For license years beginning on and after July 1, 1998, every qualified
company shall be allowed a credit against the tax imposed by &#xA7; 58.1-2501 in
an amount equal to the retaliatory costs incurred during the corresponding
taxable year as a result of the difference between other states&#8217; lower
premium tax rates and other costs and the tax rates and costs imposed by the
Commonwealth of Virginia. For license years beginning on and after July 1, 2006,
and taxable years ending on and after December 31, 2006, the amount of the
credit for those qualified companies not receiving a credit for the taxable year
2000 shall be limited to 60 percent of the retaliatory costs paid to other
states for those companies.

B. As used in this section:
			&#8220;Affiliate&#8221; of a specific company or a company
&#8220;affiliated&#8221; with a specific company means a company that directly
or indirectly through one or more intermediaries controls, is controlled by, or
is under common control with the company specified. A company shall be deemed to
control, be controlled by, or be under common control with the company specified
if their relationship to each other is such that one company owns at least 80
percent of the voting power of the other company or at least 80 percent of the
voting power of all companies is owned by the same interests.
			&#8220;Affiliated insurance group&#8221; means two or more affiliated
companies (i) at least one of which is a domestic insurance company and (ii)
each of which is in the business of insurance, leasing, financial services, or
providing administrative or other support for other members of the group, or is
a holding company for the other members of the group.
			&#8220;Domestic insurance company&#8221; means any insurance company
incorporated or organized under the laws of this Commonwealth and headquartered
within this Commonwealth.
			&#8220;Permanent full-time position&#8221; means a position of an indefinite
duration in this Commonwealth requiring a minimum of 35 hours of an
employee&#8217;s time a week for the entire normal year of the company&#8217;s
operations, which &#8220;normal year&#8221; shall consist of at least 48 weeks.
Seasonal or temporary positions and positions in building and grounds
maintenance, security, and other such positions which are ancillary to the
principal business of the employer shall not qualify as new, permanent full-time
positions.
			&#8220;Qualified company&#8221; means a domestic insurance company that (i)
has made a qualified investment in this Commonwealth and (ii) for license years
beginning on or after July 1, 1998, maintained the employment level required for
a qualified investment, such level to be measured as of December 31 of the
corresponding taxable year. The foregoing requirements may be satisfied by
either the domestic insurance company or collectively by all the members of the
affiliated insurance group of which the qualified company is a member.
			&#8220;Qualified full-time employee&#8221; means an employee filling a
permanent full-time position with a domestic insurance company or member of an
affiliated insurance group.
			&#8220;Qualified investment&#8221; means an investment in this Commonwealth
by a domestic insurance company or any one or more members of an affiliated
insurance group that results in (i) an increase as of December 31, 1997, of at
least 325 qualified full-time employees above such company&#8217;s or
group&#8217;s total combined employment level in this Commonwealth on December
31, 1996, or (ii) during any taxable year beginning on or after January 1, 2001,
such company or group having more than 100 qualified full-time employees in this
Commonwealth during that entire taxable year.
			&#8220;Retaliatory cost&#8221; means the additional regulatory costs,
including any taxes or fees exacted for the privilege of doing business, paid by
a Virginia-domiciled insurer to another state pursuant to a law of such state
requiring, when an insurer domiciled in such other state is subject to
regulatory costs in this Commonwealth that are greater than those imposed by
such other state on insurers domiciled in this Commonwealth, the
Virginia-domiciled insurer to pay additional regulatory costs to equal the
regulatory costs imposed by this Commonwealth on an insurer domiciled in such
other state. Such term, however, shall not include penalties or interest for
late payment of taxes, fees or other charges, fines or penalties assessed as the
result of the violation of laws of such other state, or sums paid in settlement
or compromise of alleged violations of such laws.

C. Applications for a credit and for a refund of excess taxes may be submitted
by a qualified company individually or on behalf of the members of an affiliated
insurance group on or before March 1 next succeeding the end of the taxable
year. Any payment of the tax imposed under &#xA7; 58.1-2501, including any
credit claimed under this section, shall be deemed to have been made with the
return filed on March 1 reporting such tax and claiming any credits or on the
last day prescribed for the timely filing of such return or, if later, the
actual date of payment or notice of denial of any credits claimed hereunder. An
amended application or return may be filed, and a credit claimed under this
section, within one year of the payment of the tax for such year. Applications
shall be submitted with a form approved by the Department and signed by an
independent certified public accountant licensed by the Commonwealth who states
that the domestic insurance company or affiliated insurance group, as
applicable, is eligible for the credit claimed.

D. Any credit provided pursuant to this section shall be taken after all other
applicable credits. Any credit not taken by a domestic insurance company may be
taken by other members of an affiliated insurance group. Any credit not used to
offset tax for the taxable year in which the credit was allowed may be, to the
extent not so used, carried forward to future taxable years until the entire
credit amount is used. Unused credits, including credits carried forward from
previous years, exclusive of refunds due to overpayment or other sources, per
domestic insurance company or affiliated insurance group, as applicable, shall
be refunded to such company, or to the members of such group as they may agree,
upon filing a refund application with the Department, in an amount not exceeding
$800,000 annually, except for those qualified companies receiving a credit in
taxable year 2000, which may file a refund application with the Department for
taxable years beginning on and after January 1, 2011, for an amount not
exceeding $7 million, annually. Refunds for unused credits shall first be
applied to reduce the oldest unused credits. Refunds, including refunds based on
the application of credits and overpayments of estimated taxes, shall be made
after July 1 following the filing of the refund application and paid out of the
state treasury.

E. If two or more domestic insurance companies paying retaliatory costs in any
year are members of an affiliated insurance group, the total of the retaliatory
costs paid may be combined and apportioned among the members of the affiliated
insurance group as the members may agree.

F. The failure of a domestic insurance company or members of an affiliated
insurance group to qualify for a new credit under this section in any year shall
not affect its ability to use credits carried over from previous years.

HISTORY: 1998, c. 365; 2009, c. 567; 2011, cc. 817, 850, 863.