A.  Computation of tax.  The tax on insurance companies other than life or mutual, shall be computed upon the net income from sources within the State of Louisiana.  

B.  Definition of income, etc.  In the case of an insurance company subject to the tax imposed by this Section:

(1)  “Gross income” means the sum of

(a)  the combined gross amount earned during the taxable year, from investment income and from underwriting income as provided in this subsection, computed on the basis of the underwriting and investment exhibit of the annual statement approved by the National Convention of Insurance Commissioners, and

(b)  gain during the taxable year from the sale or other disposition of property, and

(c)  all other items constituting gross income under La. Rev. Stat. 47:42 through 47:53;

(2)  “Net income” means the gross income as defined in paragraph (1) of this Subsection, less the deductions allowed by Subsection C of this Section;

(3)  “Investment income” means the gross amount of income earned during the taxable year from interest, dividends, and rents, computed as follows: To all interest, dividends, and rents received during the taxable year, add interest, dividends, and rents due and accrued at the end of the taxable year, and deduct all interest, dividends, and rents due and accrued at the end of the preceding taxable year;

(4)  “Underwriting income” means the premiums earned on insurance contracts during the taxable year less losses incurred and expenses incurred;

(5)  “Premiums earned on insurance contracts during the taxable year” means an amount computed as follows: From the amount of gross premiums written on insurance contracts during the taxable year, deduct return premiums and premiums paid for reinsurance.  To the result so obtained add unearned premiums on outstanding business at the end of the preceding taxable year and deduct unearned premiums on outstanding business at the end of the taxable year;

(6)  “Losses incurred” means losses incurred during the taxable year on insurance contracts, computed as follows: To the losses paid during the taxable year, add salvage and reinsurance recoverable outstanding at the end of the preceding taxable year, and deduct salvage and reinsurance recoverable outstanding at the end of the taxable year.  To the result so obtained, add all unpaid losses outstanding at the end of the taxable year, and deduct unpaid losses outstanding at the end of the preceding taxable year;

(7)  “Expenses incurred” means all expenses shown on the annual statement approved by the National Convention of Insurance Commissioners, and shall be computed as follows: To all expenses paid during the taxable year, add expenses unpaid at the end of the taxable year, and deduct expenses unpaid at the end of the preceding taxable year.  For the purpose of computing the net income subject to the tax imposed by this Section, there shall be deducted from expenses incurred as defined in this paragraph all expenses incurred which are not allowed as deductions by Subsection C of this Section.  

C.  Deductions allowed.  In computing the net income of an insurance company subject to the tax imposed by this Section, there shall be allowed as deductions:

(1)  All ordinary and necessary expenses incurred, as provided in La. Rev. Stat. 47:62;

(2)  All interest as provided in La. Rev. Stat. 47:54;

(3)  Taxes as provided in La. Rev. Stat. 47:55;

(4)  Losses incurred as defined in Subsection B(6) of this Section;

(5)  Losses sustained during the taxable year from the sale or other disposition of property;

(6)  Bad debts in the nature of agency balances and bills receivable ascertained to be worthless and charged off within the taxable year;

(7)  The amount received as dividends from corporations as provided in La. Rev. Stat. 47:63;

(8)  The amount of interest earned during the taxable year upon obligations of a state, territory, or any political subdivision thereof, or the District of Columbia, or the federal government, or any of its possessions, or obligations of a corporation organized under an act of the Congress of the United States, if such corporation is an instrumentality of the United States;

(9)  A reasonable allowance for the exhaustion, wear and tear of property, as provided in La. Rev. Stat. 47:65.  

D.  Repealed by Acts 1968, No. 106, §10.  

E.  Double deductions.  Nothing in this Section shall be construed to permit the same item to be deducted twice.  

Amended by Acts 1968, No. 106, §7.