2005 Texas Insurance Code CHAPTER 225. SURPLUS LINES INSURANCE PREMIUM TAX

INSURANCE CODE

CHAPTER 225. SURPLUS LINES INSURANCE PREMIUM TAX


	§ 225.001. DEFINITION.  In this chapter, "premium" 
includes:              
		(1)  a premium;                                                               
		(2)  a membership fee;                                                        
		(3)  an assessment;                                                           
		(4)  dues;  and                                                               
		(5)  any other consideration for surplus lines 
insurance.                   

Added by Acts 2003, 78th Leg., ch. 1274, § 1, eff. April 1, 2005.          


	§ 225.002. APPLICABILITY OF CHAPTER.  This chapter 
applies to a surplus lines agent who collects gross premiums for 
surplus lines insurance.

Added by Acts 2003, 78th Leg., ch. 1274, § 1, eff. April 1, 2005.          


	§ 225.003. APPLICABILITY OF GENERAL PROVISIONS OF OTHER 
LAW.  The provisions of Chapter 981, including provisions relating 
to the applicability and enforcement of that chapter, rulemaking 
authority under that chapter, and definitions of terms applicable 
in that chapter, apply to this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, § 1, eff. April 1, 2005.          


	§ 225.004. TAX IMPOSED;  RATE.  (a) A tax is imposed on 
gross premiums for surplus lines insurance.  The rate of the tax is 
4.85 percent of the gross premiums.
	(b)  Taxable gross premiums under this section are based on 
gross premiums written or received for surplus lines insurance 
placed through an eligible surplus lines insurer during a calendar 
year.
	(c)  If a surplus lines insurance 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 premium that may be subject to 
taxation by 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.                                
	(e)  The following premiums are not taxable in this state:                     
		(1)  premiums properly allocated to another state that 
are specifically exempt from taxation in that state;  and
		(2)  premiums on risks or exposures that are properly 
allocated to federal or international waters or are under the 
jurisdiction of a foreign government.

Added by Acts 2003, 78th Leg., ch. 1274, § 1, eff. April 1, 2005.          


	§ 225.005. TAX EXCLUSIVE.  The tax imposed by this 
chapter is in lieu of all other insurance taxes.

Added by Acts 2003, 78th Leg., ch. 1274, § 1, eff. April 1, 2005.          


	§ 225.006. COLLECTION OF TAX BY AGENT.  The surplus lines 
agent shall collect from the insured the tax imposed by this chapter 
at the time of delivery of the cover note, certificate of insurance, 
policy, or other initial confirmation of insurance and the full 
amount of the gross premium charged by the eligible surplus lines 
insurer for the insurance.

Added by Acts 2003, 78th Leg., ch. 1274, § 1, eff. April 1, 2005.          


	§ 225.007. COLLECTED TAXES HELD IN TRUST.  A surplus 
lines agent holds taxes collected under this chapter in trust.

Added by Acts 2003, 78th Leg., ch. 1274, § 1, eff. April 1, 2005.          


	§ 225.008. TAX PAYMENT, REPORT, AND DUE DATE.  (a) The tax 
imposed by this chapter is due and payable on or before March 1.  A 
surplus lines agent shall file a tax report with the tax payment.
	(b)  A surplus lines agent shall pay the tax imposed by this 
chapter and file the report using forms prescribed by the 
comptroller.

Added by Acts 2003, 78th Leg., ch. 1274, § 1, eff. April 1, 2005.          


	§ 225.009. PREPAYMENT OF TAX.  (a) A surplus lines agent 
shall prepay the tax imposed by this chapter when the amount of the 
accrued taxes due is equal to at least $70,000.
	(b)  A surplus lines agent shall prepay the taxes using a 
form prescribed by the comptroller.  The prepayment is due on or 
before the 15th day of the month following the month in which the 
amount of taxes described by this section accrues.

Added by Acts 2003, 78th Leg., ch. 1274, § 1, eff. April 1, 2005.          


	§ 225.010. TAX ABSORPTION AND REBATES PROHIBITED.  (a) A 
surplus lines agent may not absorb the tax imposed by this chapter.
	(b)  A surplus lines agent may not rebate all or part of the 
tax or the agent's commission as an inducement for insurance or for 
any other reason.

Added by Acts 2003, 78th Leg., ch. 1274, § 1, eff. April 1, 2005.          


	§ 225.011. CANCELED OR REWRITTEN INSURANCE CONTRACT.  If 
a surplus lines insurance contract is canceled and rewritten, the 
additional premium for purposes of the tax imposed by this chapter 
is the premium amount that exceeds the unearned premium of the 
canceled contract.

Added by Acts 2003, 78th Leg., ch. 1274, § 1, eff. April 1, 2005.          


	§ 225.012. STATE AS PREFERRED CREDITOR.  If the property 
of a surplus lines agent is seized as the result of an intermediate 
or final decision of a court in this state, or if the business of a 
surplus lines agent is suspended by the action of a creditor or 
turned over to an assignee, receiver, or trustee, the tax imposed by 
this chapter and penalties due the state from the agent are 
preferred claims and the state is a preferred creditor and must be 
paid in full.

Added by Acts 2003, 78th Leg., ch. 1274, § 1, eff. April 1, 2005.          


	§ 225.013. FAILURE TO PAY TAXES;  CRIMINAL PENALTY.  (a) A 
surplus lines agent who does not pay the tax imposed by this chapter 
on or before the due date required by this chapter or who 
fraudulently withholds, appropriates, or otherwise uses any 
portion of the tax commits the offense of theft, regardless of 
whether the surplus lines agent has or claims an interest in the 
tax.
	(b)  An offense under this section is punishable as provided 
by law.         

Added by Acts 2003, 78th Leg., ch. 1274, § 1, eff. April 1, 2005.