Section 20. Every life insurance company, as defined by section one hundred and eighteen of chapter one hundred and seventy-five, authorized to transact business in the commonwealth shall annually pay an excise of two per cent upon all new and renewal premiums received during the preceding calendar year for all policies allocable to this commonwealth, as hereinafter provided. In the case of a foreign life insurance company, the policy shall be deemed to be allocable to this commonwealth if the insured is a resident of the commonwealth at the time of payment of the premium therefor. In the case of a domestic life insurance company, the policy shall be deemed to be allocable to this commonwealth unless the insured at the time of payment of the premium therefor is a resident of a state or country to which such company actually pays an insurance excise.
The word “premiums” as used in this section shall include all amounts received as consideration for life insurance policies without deduction for amounts paid to other companies for reinsurance and shall include dividends applied to purchase additional insurance or to shorten the premium paying period. In determining the amount of the excise payable hereunder there shall be deducted, to the extent that they are properly allocable to premiums taxable hereunder, (a) all premiums returned to policyholders during said preceding calendar year but not including cash surrender values, and (b) dividends which during said year have been paid or credited to policyholders or applied to purchase additional insurance or to shorten the premium paying period.
All premiums received by any life insurance company for contingencies of any character insured against by such company under authority of clause sixth of section forty-seven of chapter one hundred and seventy-five shall be excluded, except as hereinafter provided, from taxation under this section and shall be taxable under sections twenty-two and twenty-three of this chapter. All premiums received by any such company for provisions for total and permanent disability or accidental death benefit incorporated in policies or contracts under section twenty-four of said chapter one hundred and seventy-five or any supplemental policies issued under said section twenty-four shall be taxable under this section.