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Form In-0578 - Statement Of Premiums And Fees For Taxation - Companies Other Than Life - Tennessee Department Of Commerce And Insurance - 2002 Page 3

7. TAX ON WORKMEN’S COMPENSATION INSURANCE – Every insurance company writing Workmen’s Compensation Insurance is

subject to a four percent (4%) tax on gross premiums, plus a surcharge of fourtenths of one percent (.4%). The surcharge is not

applicable to any employer who employs ten (10) or less employees, unless such employer is in the business of construction or

manufacturing. The four percent (4%) tax on Workmen’s Compensation premiums is in lieu of the two and onehalf percent (21/2%)

tax on all other premiums. Therefore, all Workmen’s Compensation premiums should be listed on line 2 of the tax return. Do not list

any Workmen’s Compensation premiums in line 1 of page 1.

8. PROPER REMITTANCE – All checks for payment of any premium tax or fees due should be made payable to the TENNESSEE

DEPARTMENT OF COMMERCE AND INSURANCE; and in order to constitute proper payment, the check must be signed, drafted

and dated correctly.

9. PENALTY FOR LATE PAYMENT AND DEFICIENT TAXES DUE – Any company which fails and neglects to file the tax return and

make payment promptly and correctly as defined by Tenn. Code Ann. § 564216, shall pay to the state, in addition to the amount of

taxes due, a penalty of five percent (5%) for each of the first two months or fractional parts thereof and thereafter at the rate of onehalf

of one percent (1/2%) per month with a maximum of ten thousand dollars ($10,000) for the first three days of any delinquency. In

addition to the above penalty, all delinquencies shall bear interest at the rate of ten percent (10%) per annum from the date the amount

was due until paid. The penalty and interest herein provided for shall apply to any part of the tax unpaid by the due date and no such

penalty or interest may be waived. NO GRACE PERIOD WILL BE ALLOWED FOR COMPANIES FILING LATE PREMIUM TAX

RETURNS.

10. INVESTMENT CREDIT – Insurers that qualify for a reduction in the premium taxes for investment in Tennessee securities must

compute this credit on their annual return filed March 1. There is no provision for this on the quarterly estimated returns. However,

companies that have historically qualified for this credit may effectively gain the benefit of this reduction by paying estimated taxes

based on at least 25% of the amount owed for the previous year, pursuant to Tenn. Code Ann. §564205(2).

Instructions for IN0578 (Rev. 10/02)

Form In-0578 - Statement Of Premiums And Fees For Taxation - Companies Other Than Life - Tennessee Department Of Commerce And Insurance - 2002 Page 3