A group of captive insurance associations filed a friend of the court brief supporting Reserve Mechanical Corp.'s appeal of a US Tax Court insurance tax case. The group expressed concern about areas of the Tax Court's ruling concerning prior loss history, standardized versus manuscripted policies, and risk pooling.
Reserve Mechanical Corp.'s first appeals brief outlines ways it says the US Tax Court erred in ruling against it in a captive insurance tax case, arguing that the captive insurance arrangement met necessary criteria for insurance.
Johnson & Johnson was successful on appeal of a New Jersey Tax Court decision regarding independently procured tax. The court found Johnson & Johnson liable only for independent procurement tax on New Jersey risk related to premium paid to its captive insurance company.
The federal excise tax (FET) is imposed at the federal level on insurance premiums or reinsurance premiums that are paid by a US person to a foreign non-US person with regard to US risks. Bruce Wright, partner at Eversheds Sutherland (US) LLP, discusses what captive owners should know about FET.