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304.10-180 Taxes on surplus lines.
(1)
(2)
For single state risks located solely within this state, each broker shall pay the
following taxes:
(a) A tax at the rate of three percent (3%) on the premiums, assessments, fees,
charges, or other consideration deemed part of the premium as defined in KRS
304.14-030, on surplus lines insurance subject to tax transacted by him or her
with unauthorized insurers during the preceding calendar quarter as shown by
his or her quarterly statement filed with the commissioner in accordance with
KRS 304.10-170. The tax shall not be assessed on the premium surcharge tax,
the local government premium tax, or any other state or federal tax. The tax
shall be remitted to the commissioner within thirty (30) days of the end of
each calendar quarter. When collected the tax shall be credited to the
insurance regulatory trust fund, as established by KRS 304.2-400;
(b) The premium surcharge tax, to be remitted to the Kentucky Department of
Revenue, in accordance with KRS 136.392; and
(c) The local government premium tax, to be remitted to the appropriate city,
county, or urban-county government taxing authority, in accordance with KRS
91A.080. Each broker shall be subject to the provisions of this section and
KRS 91A.080 and 91A.0802 to 91A.0810 as an insurance company.
For multistate risks, each broker shall pay a tax at the rate of eleven and eight-tenths
percent (11.8%) on premiums in accordance with the uniform Allocation Formula
and other rules adopted by the Surplus Lines Insurance Multi-State Compliance
Compact Commission established in KRS 304.10-400. The tax collected on
multistate risks shall be remitted to the Department of Insurance, which shall no less
than semiannually divide and distribute the revenues as follows:
(a) Twenty-five percent (25%) of the tax collected shall be retained by the
Department of Insurance and treated as if collected pursuant to subsection
(1)(a) of this section;
(b) Fifteen percent (15%) of the tax collected shall be distributed to the
Department of Revenue and treated as if it was collected pursuant to KRS
136.392 and shall be used for the purposes of funding:
1.
The Firefighters Foundation Program fund, as provided by KRS
95A.220 and 95A.262; and
2.
The Law Enforcement Foundation Program Fund as provided by KRS
15.430; and
(c) Sixty percent (60%) of the tax collected shall be distributed to the Department
for Local Government. The Department for Local Government:
1.
Shall determine the share of the tax for each city and county government
on a pro rata basis pursuant to a distribution formula that is based upon
the percentage of each city's and county's historical local premium tax
collections from surplus lines insurance in calendar years 2007, 2008,
and 2009, as compared to the total of all local insurance premium taxes
on surplus lines insurance collected in calendar years 2007, 2008, and
2.
3.
4.
2009;
Shall exclude any city or county from the distribution that collected a
total of less than five hundred dollars ($500) in insurance premium taxes
from surplus lines insurance for calendar years 2007, 2008, and 2009
and the total amount of these city or county collections of less than five
hundred dollars ($500) shall be excluded from the determination of the
total local insurance premium tax collections required by this
subsection;
Shall not less than semiannually distribute the proceeds to city and
county governments for the purposes of funding public safety, including
but not limited to:
a.
Police;
b.
Fire;
c.
Emergency 911 services; and
d.
Ambulance services; and
May charge a yearly administrative fee equal to one percent (1%) of the
total local government portion provided under this subsection, not to
exceed ten thousand dollars ($10,000) per year statewide.
Effective: June 8, 2011
History: Amended 2011 Ky. Acts ch. 48, sec. 4, effective June 8, 2011. -- Amended
2010 Ky. Acts ch. 24, sec. 1099, effective July 15, 2010; and ch. 165, sec. 2,
effective July 15, 2010. -- Amended 2008 Ky. Acts ch. 94, sec. 6, effective July 15,
2008. -- Amended 2005 Ky. Acts ch. 85, sec. 678, effective June 20, 2005. -Amended 2002 Ky. Acts ch. 273, sec. 42, effective July 15, 2002. -- Amended 2000
Ky. Acts ch. 393, sec. 45, effective July 14, 2000. -- Amended 1982 Ky. Acts ch.
123, sec. 12, effective July 15, 1982. -- Created 1970 Ky. Acts ch. 301, subtit. 10,
sec. 18, effective June 18, 1970.
Legislative Research Commission Note (6/8/2011). 2011 Ky. Acts ch. 48, sec. 5,
provided that the provisions contained in Sections 2, 3, and 4 of that Act "shall take
effect as provided in Article XIII of Section 1 of this Act, upon legislative enactment
of the compact into law by two compacting states, provided the commission shall
become effective for purposes of adopting rules, and creating the clearinghouse when
there are a total of ten compacting states and contracting states or, alternatively, when
there are compacting states and contracting states representing greater than 40
percent of the surplus lines insurance premium volume based on records of the
percentage of surplus lines insurance." The Reviser of Statutes has determined that,
as of April 8, 2011, two states had enacted the compact, thereby triggering the initial
effective date of the compact. Since 2011 Ky. Acts ch. 48, did not contain an
emergency clause, this section became effective June 8, 2011, the normal effective
date for 2011 legislation.
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