§8201 Reporting, payment, and allocation of premium taxes

Summary

Only the insured’s home state can require payment of premium taxes for nonadmitted insurance. States may make a compact or other agreement to split those taxes among themselves. If a compact is adopted on or before the end of the 330-day period that begins on July 21, 2010, it applies to taxes due on or after July 21, 2010. If a compact is adopted after that 330-day period ends, it applies to taxes due on or after January 1 of the first calendar year that begins after the period ends. When that 330-day period ends, the NAIC may report to the House Committees on Financial Services and the Judiciary and the Senate Committee on Banking, Housing, and Urban Affairs which compacts or procedures states adopted. Congress expects each state to use uniform rules, forms, and procedures (for example, an interstate compact) for reporting, paying, collecting, and allocating these taxes. To help pay and split taxes, an insured’s home state may require surplus lines brokers and people who bought insurance on their own to file a yearly tax allocation report. The report must show how much of the premium is tied to risks or property in each state. The insured can let an authorized agent file the report and pay the tax for them.