Tex.
Ins. Code Section 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 (Surplus Lines Insurance) on which premium tax is paid in accordance with Chapter 225 (Surplus Lines Insurance Premium Tax);(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.
Source:
Section 226.003 — Tax Imposed; Rate, https://statutes.capitol.texas.gov/Docs/IN/htm/IN.226.htm#226.003 (accessed Jun. 5, 2024).
