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Insurance Premiums Tax

The Insurance Premiums Tax applies to premiums collected on insurance risks by every insurance company transacting business in ³Ô¹ÏºÚÁÏ. The tax base is gross contract premiums less specified deductions. Annuity considerations and reinsurance premiums are not taxed.

With a few exceptions, the tax rate is 2% of the premiums collected on insurance risks in this State. The tax is prepaid based on the previous year’s premiums, with payments due March 1 and June 1.

Exceptions:

• Group accident and health insurance premiums (1%);
• Ocean marine risks (5% of three-year average of underwriting profits);
• Workers’ compensation premiums (2.25%).

If, for any insurance company, the ratio of ³Ô¹ÏºÚÁÏ business to total business is greater than 12.5%, the tax is imposed on only 12.5% of that company’s total premiums. Another .05% is imposed on group accident and health premiums, and another .1% on all other insurance premiums.