As used in Chapter 77, article 9, unless the context otherwise requires:

(1) Domestic, foreign, and alien insurance companies shall have the meanings as set forth in section 44-103 and shall include reciprocal or interinsurance exchanges and their designated attorneys in fact as defined in Chapter 44, article 12;

(2) Department shall mean the Department of Insurance;

(3) Director shall mean the Director of Insurance;

(4) Premiums shall mean the consideration paid to insurance companies for insurance and shall include policy fees, assessments, dues, or other similar payments, except that premiums on all annuity contracts and pension, profit-sharing, individually sponsored retirement plans, and other pension plan contracts which are described in section 818(a) of the Internal Revenue Code shall be exempt from taxation;

(5) License shall mean certificate of authority as contemplated by section 44-105; and

(6) Direct writing shall mean insurance as defined in section 44-102, but shall not include reinsurance as defined in section 44-103.

Every insurance company organized under the stock, mutual, assessment, or reciprocal plan, except fraternal benefit societies, which is transacting business in this state shall, on or before March 1 of each year, pay a tax to the director of one percent of the gross amount of direct writing premiums received by it during the preceding calendar year for business done in this state, except that (1) for group sickness and accident insurance the rate of such tax shall be five-tenths of one percent and (2) for property and casualty insurance, excluding individual sickness and accident insurance, the rate of such tax shall be one percent. A captive insurer authorized under the Captive Insurers Act that is transacting business in this state shall, on or before March 1 of each year, pay to the director a tax of one-fourth of one percent of the gross amount of direct writing premiums received by such insurer during the preceding calendar year for business transacted in the state. The taxable premiums shall include premiums paid on the lives of persons residing in this state and premiums paid for risks located in this state whether the insurance was written in this state or not, including that portion of a group premium paid which represents the premium for insurance on Nebraska residents or risks located in Nebraska included within the group when the number of lives in the group exceeds five hundred. The tax shall also apply to premiums received by domestic companies for insurance written on individuals residing outside this state or risks located outside this state if no comparable tax is paid by the direct writing domestic company to any other appropriate taxing authority. Companies whose scheme of operation contemplates the return of a portion of premiums to policyholders, without such policyholders being claimants under the terms of their policies, may deduct such return premiums or dividends from their gross premiums for the purpose of tax calculations. Any such insurance company shall receive a credit on the tax imposed as provided in the Creating High Impact Economic Futures Act, the Nebraska Job Creation and Mainstreet Revitalization Act, the New Markets Job Growth Investment Act, the Nebraska Higher Blend Tax Credit Act, the Relocation Incentive Act, the Sustainable Aviation Fuel Tax Credit Act, the Nebraska Shortline Rail Modernization Act, and the Affordable Housing Tax Credit Act.

(1) The computation of the taxes as provided in Chapter 77, article 9, shall be made on forms furnished by the Department of Insurance and shall be forwarded to the department together with a sworn statement by an appropriate fiscal officer of the company attesting the accuracy of the tax computation. The department shall furnish such forms to the companies together with any information relative to the taxes as may be needful or desirable. Upon receipt of the tax payment, the director shall audit and examine the computations and satisfy himself or herself that the taxes have been properly paid in conformity with Chapter 77, article 9.

(2) Commencing with taxes imposed for 1985 or any subsequent year, whenever it appears to the satisfaction of the director that, because of a mistake of fact, error in calculation, or erroneous interpretation of a statute not pertaining to the statute's constitutionality, any tax has been erroneously paid to the director, he or she shall have the authority to refund or credit the amount of such erroneous overpayment. The refund or credit may be made by applying such amount towards the payment of other similar taxes already due or which may become due until such overpayment has been fully reimbursed. A claim for refund or credit of an overpayment of a tax caused by a mistake of fact, error in calculation, or erroneous interpretation of a statute not pertaining to the statute's constitutionality shall be filed by the taxpayer within one year from the date the overpayment was made or such claim shall be forever barred.

The director shall rescind or refuse to reissue the license of any company which fails to remit its taxes in conformity with Chapter 77, article 9. Prior to rescinding such license, the director shall issue an order to such company directing the company to show cause why such rescission should not be made. He or she shall in the order give not less than ten days' notice for a hearing before the department. Should the company be aggrieved by such determination, the company may appeal the determination, and the appeal shall be in accordance with the Administrative Procedure Act.

The Director of Insurance shall transmit fifty percent of the taxes paid in conformity with Chapter 44, article 1, and Chapter 77, article 9, to the State Treasurer, forty percent of such taxes paid to the General Fund, and ten percent of such taxes paid to the Mutual Finance Assistance Fund promptly upon completion of his or her audit and examination and in no event later than May 1 of each year, except that:

(1) All fire insurance taxes paid pursuant to sections 44-150 and 81-523 shall be remitted to the State Treasurer for credit to the General Fund;

(2) All workers' compensation insurance taxes paid pursuant to section 44-150 shall be remitted to the State Treasurer for credit to the Compensation Court Cash Fund; and

(3) Commencing with the premium and related retaliatory taxes for the taxable year ending December 31, 2001, and for each taxable year thereafter, all premium and related retaliatory taxes imposed by section 44-150 or 77-908 paid by insurers writing health insurance in this state shall be remitted to the Comprehensive Health Insurance Pool Distributive Fund.

The Insurance Tax Fund is created. The State Treasurer shall receive the funds paid pursuant to Chapter 77, article 9, and except as provided in sections 77-912 and 77-918 shall keep all money received in the Insurance Tax Fund. Any money in the fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

Prior to June 1 of each year, the State Treasurer shall disburse or allocate all of the funds in the Insurance Tax Fund on May 1 of each year as follows:

(1) Ten percent of the total shall be allocated to the counties proportionately in the proportion that the population of each county bears to the entire state, as shown by the last federal decennial census;

(2) Thirty percent of the total shall be allocated to the Municipal Equalization Fund; and

(3) Sixty percent of the total shall be allocated to the State Department of Education for distribution to school districts as equalization aid pursuant to the Tax Equity and Educational Opportunities Support Act as follows: The Commissioner of Education shall (a) include the amount certified by the State Treasurer pursuant to this section in the state aid certified to each school district pursuant to section 79-1022 and (b) distribute such funds as equalization aid under the provisions of the act during the ensuing fiscal year.

(1) Commencing with taxes imposed for 1985 or any subsequent year, if a taxpayer believes any tax imposed pursuant to Chapter 77, article 9, is unconstitutional and chooses to challenge such tax, the taxpayer shall pay the tax under protest and, within thirty days after payment or within thirty days after March 15, 1986, whichever is later, initiate a court challenge to the tax in the district court of Lancaster County, which challenge shall be heard by the district court de novo.

(2) If, by judgment or final order of any court of competent jurisdiction in this state in an action not pending on appeal or error, it is adjudged and determined that such taxes are unconstitutional, such taxes shall be refunded only by applying such refund as a credit against the payment of any such tax falling due thereafter unless special circumstances, as determined by the director, require a refund.

No injunction shall be granted restraining the collection of taxes levied pursuant to Chapter 77, article 9. The provisions of section 77-915 shall be the exclusive remedy available to the taxpayer.

Any political subdivision which has received funds pursuant to section 77-913 shall not be required to return any funds received pursuant to such section resulting from a final order or judgment of a court that such tax is unconstitutional.

Insurers transacting insurance in this state whose annual tax for the preceding taxable year was four thousand dollars or more shall make prepayments of the annual taxes imposed pursuant to Chapter 77, article 9, and related retaliatory taxes imposed pursuant to Chapter 44, article 1.

Each insurer required to make prepayments shall remit such prepayments on or before April 15, June 15, and September 15 of the current taxable year. Remittance for such prepayments shall be accompanied by a prepayment form prescribed by the director.

The amount of each such prepayment shall be at least one-fourth of either (1) the total tax paid for the immediately preceding taxable year or (2) eighty percent of the actual tax due for the current taxable year.

The director, for good cause shown, may extend for not more than ten days the time for making a prepayment. The extension may be granted at any time if a request for such extension is filed with the director within or prior to the period for which the extension may be granted. Insurers who fail to pay any premium or retaliatory tax, including prepayments, when due shall pay interest at the rate prescribed by section 45-104.02, as such rate may from time to time be adjusted, until such tax is paid. Any insurer who fails to make the prepayments within the prescribed time period or to obtain an extension shall be subject to the penalties prescribed in section 77-911.

The director shall immediately deposit one-half of the prepayments received in the Premium and Retaliatory Tax Suspense Fund, which fund is hereby created, and one-half of the prepayments received in the General Fund. Commencing with the premium and related retaliatory taxes for the taxable year ending December 31, 2001, and for each taxable year thereafter, the director shall determine the amount of the premium and related retaliatory taxes imposed by section 44-150 or 77-908 paid by insurers writing health insurance in this state, except as otherwise set forth in subdivisions (1) and (2) of section 77-912, and such amount shall be credited to the Comprehensive Health Insurance Pool Distributive Fund. Except as provided in subsection (5) of section 44-4225, on May 1 of each year the director shall transfer all of the interest earned in the Premium and Retaliatory Tax Suspense Fund on the immediately preceding year's prepayments to the General Fund and transfer the balance of the preceding year's prepayments deposited in the Premium and Retaliatory Tax Suspense Fund to the Insurance Tax Fund. Any money in the Premium and Retaliatory Tax Suspense Fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.