1.Clarification of definition
of gross receipts for purposes of determining tax exemption of small property
and casualty insurance companies
(a)Section 501(c)(15) of
the Internal Revenue Code is amended by adding at the end the following:
(D)For purposes of subparagraph (A), the term
gross receipts means the gross amount received during the taxable
year from the items described in section 834(b) and premiums (including
deposits and
assessments).
.
(b)The amendment made by
this section shall apply to taxable years beginning after December 31,
2003.
2.Increase in limitation
for alternative tax liability for small property and casualty insurance
companies
(a)Clause (i) of section
831(b)(2)(A) of the Internal Revenue Code of 1986 is amended to read as
follows:
(i)the net written premiums (or, if greater,
direct written premiums) for the taxable year do not exceed $1,971,000,
and
.
(b)Paragraph (2) of
section 831(b) of such Code is amended by adding at the end the following new
subparagraph:
(C)In the case of any
taxable year beginning in a calendar year after 2006, the $1,971,000 amount set
forth in subparagraph (A) shall be increased by an amount equal to—
(i)$1,971,000, multiplied by
(ii)the cost-of-living adjustment determined
under section 1(f)(3) for such calendar year by substituting calendar
year 2005
for calendar year 1992
in subparagraph (B)
thereof. If the amount as adjusted under the preceding sentence is not a
multiple of $1,000, such amount shall be rounded to the next lowest multiple of
$1,000.
.
(c)The amendments made by
this section shall apply to taxable years beginning after December 31,
2005.