CHAPTER 226. UNAUTHORIZED AND INDEPENDENTLY PROCURED INSURANCE PREMIUM TAX
INSURANCE CODE
TITLE 3. DEPARTMENT FUNDS, FEES, AND TAXES
SUBTITLE B. INSURANCE PREMIUM TAXES
CHAPTER 226. UNAUTHORIZED AND INDEPENDENTLY PROCURED INSURANCE
PREMIUM TAX
SUBCHAPTER A. UNAUTHORIZED INSURANCE PREMIUM TAX
Sec. 226.001. DEFINITIONS. In this subchapter:
(1) "Insurer" has the meaning assigned by Section 101.002 and
includes:
(A) an insurer that does not hold a certificate of authority in
this state;
(B) an eligible surplus lines insurer; and
(C) an insurer that holds a certificate of authority in this
state.
(2) "Premium" includes any consideration for insurance,
including:
(A) a premium;
(B) a membership fee;
(C) an assessment; or
(D) dues.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.005(a), eff. September 1, 2005.
Sec. 226.002. APPLICABILITY OF SUBCHAPTER. This subchapter
applies to an insurer who charges gross premiums for insurance on
a subject resident, located, or to be performed in this state.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.005(b), eff. September 1, 2005.
Sec. 226.003. TAX IMPOSED; RATE. (a) A tax is imposed on each
insurer that charges gross premiums subject to taxation under
this section. The rate of the tax is 4.85 percent of the gross
premiums charged by the insurer.
(b) Except as otherwise provided by this section, in determining
an insurer's taxable gross premiums, the insurer shall include
any premium for insurance on a subject resident, located, or to
be performed in this state.
(c) If a policy covers risks or exposures only partially located
in this state, the tax is computed on the portion of the premium
that is properly allocated to a risk or exposure located in this
state.
(d) In determining the amount of taxable premiums under
Subsection (c), a premium, other than a premium properly
allocated or apportioned and reported as a taxable premium of
another state, is considered to be written on property or risks
located or resident in this state if the premium:
(1) is written, procured, or received in this state; or
(2) is for a policy negotiated in this state.
(d-1) Notwithstanding Subsections (b) through (d), the
comptroller by rule may establish that all premiums are
considered to be on risks located in this state:
(1) if the insured's home office or state of domicile or
residence is located in this state; or
(2) to accommodate changes in federal statutes or regulations
that would otherwise limit the comptroller's ability to directly
collect the taxes due under this section.
(e) Insurance on a subject resident, located, or to be performed
in this state is considered to be insurance procured, continued,
or renewed in this state regardless of the location from which:
(1) the application is made;
(2) the negotiations are conducted; or
(3) the premiums are remitted.
(f) Premiums on risks or exposures that are properly allocated
to federal waters or international waters or are under the
jurisdiction of a foreign government are not taxable by this
state.
(g) The following premiums are not subject to the tax imposed by
this subchapter:
(1) premiums on insurance procured by a licensed surplus lines
agent from an eligible surplus lines insurer as defined by
Chapter 981 on which premium tax is paid in accordance with
Chapter 225;
(2) premiums on an independently procured contract of insurance
on which premium tax is paid in accordance with Subchapter B; and
(3) premiums on a contract of insurance written by an insurer
that holds a certificate of authority in this state and that is
authorized to write the contract.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.005(c), eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
932, Sec. 7, eff. June 15, 2007.
Sec. 226.004. TAX EXCLUSIVE. The tax imposed by this subchapter
is in lieu of all other insurance taxes.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1,
2005.
Sec. 226.005. TAX PAYMENT; DUE DATE. (a) The tax imposed by
this subchapter is due and payable not later than:
(1) March 1 after the end of the calendar year in which the
insurance was effectuated, continued, or renewed; or
(2) another date prescribed by the comptroller.
(b) An insurer shall pay the tax imposed by this subchapter
using a form prescribed by the comptroller.
(c) The tax imposed by this subchapter, if not paid when due, is
a liability of the insurer, the insurer agent, and the insured.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.005(d), eff. September 1, 2005.
Sec. 226.006. LIMITATION ON RULEMAKING. In adopting rules under
this subchapter, the comptroller may not adopt a rule that
exceeds the requirements of this chapter.
Added by Acts 2007, 80th Leg., R.S., Ch.
932, Sec. 8, eff. June 15, 2007.
SUBCHAPTER B. INDEPENDENTLY PROCURED INSURANCE PREMIUM TAX
Sec. 226.051. DEFINITION. In this subchapter, "premium"
includes any consideration for insurance, including:
(1) a premium;
(2) a membership fee; or
(3) dues.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1,
2005.
Sec. 226.052. APPLICABILITY OF SUBCHAPTER. This subchapter
applies to an insured who procures an insurance contract in
accordance with Section 101.053(b)(4).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1,
2005.
Sec. 226.053. TAX IMPOSED; RATE. (a) A tax is imposed on each
insured at the rate of 4.85 percent of the premium paid for the
insurance contract procured in accordance with Section
101.053(b)(4).
(b) If an insurance contract covers risks or exposures only
partially located in this state, the tax is computed on the
portion of the premium that is properly allocated to a risk or
exposure located in this state.
(b-1) Notwithstanding Subsections (a) and (b), the comptroller by
rule may establish that all premiums are considered to be on
risks located in this state:
(1) if an insured's home office or state of domicile or
residence is located in this state; or
(2) to accommodate changes in federal statutes or regulations
that would otherwise limit the comptroller's ability to directly
collect the taxes due under this section.
(c) Premiums for individual life or individual disability
insurance are not included in determining an insured's taxable
premiums.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1,
2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
932, Sec. 9, eff. June 15, 2007.
Sec. 226.054. TAX PAYMENT BY CERTAIN INSUREDS. (a) Except as
provided by Section 226.055, the tax imposed by this subchapter
is due and payable not later than:
(1) May 15 after the end of the calendar year in which the
insurance was procured, continued, or renewed; or
(2) another date prescribed by the comptroller.
(b) An insured who fails to withhold from the premium the amount
of tax imposed by this subchapter is liable for the amount of the
tax and shall pay the tax due.
(c) The insured shall file a tax report and pay the tax.
(d) The insured may designate another person to file the report
and pay the tax.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1,
2005.
Sec. 226.055. TAX PAYMENT BY CERTAIN CORPORATIONS. The amount
of tax due and payable under this subchapter by a corporation
that files a franchise tax report shall be reported directly to
the comptroller and is due:
(1) at the time the franchise tax report is due; or
(2) on another date prescribed by the comptroller.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1,
2005.
Sec. 226.056. EFFECT ON OTHER LAW. Sections 226.051-226.054 do
not abrogate or modify any other provision of this chapter or
Chapter 101.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1,
2005.
Sec. 226.057. LIMITATION ON RULEMAKING. In adopting rules under
this subchapter, the comptroller may not adopt a rule that
exceeds the requirements of this chapter.
Added by Acts 2007, 80th Leg., R.S., Ch.
932, Sec. 10, eff. June 15, 2007.