New Jersey Statutes Title 54. Taxation 54 § 16-8

(1) Ascertain the average annual underwriting profit derived by the insurer from such marine insurances written within the United States during the last preceding three calendar years;

(2) Ascertain the proportion which the average annual premiums of the insurer from such marine insurances written by it in this State during the last preceding three years bear to the average total of such marine premiums of the insurer during the same three years;

(3) Compute an amount of five per cent on this proportion of the aforementioned average annual underwriting profit of the insurer from such marine insurances , and compute an additional amount of twenty-five one-hundredths on that proportion which amount shall be dedicated to the Department of Insurance for payment of administrative costs related to its statutory duties; and

(4) Charge the amount of tax thus computed to such insurer as a tax upon such marine insurances written by it in this State during the current calendar year.

The Commissioner of Insurance shall each year compute the tax, according to the method described in this section, upon the average annual underwriting profit of such insurer from such marine insurances during the preceding three years, including the current calendar year, namely, at the expiration of each current calendar year, the profit or loss on such marine insurances of that year is to be added or deducted, and the profit or loss upon such marine insurances of the first calendar year of the preceding three-year period is to be dropped so that the computation of underwriting profit for purposes of taxation under this section will always be on a three-year average.