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.
