Colorado § 10-3-909 - Unauthorized insurance premium tax.

§ 10-3-909. Unauthorized insurance premium tax.

(1) Except as to premiums that are subject to a federal premium, excise, or stamp tax equal to or in excess of three percent of net premiums, and except as to premiums on independently procured insurance on which tax has been paid pursuant to section 10-3-209, 10-5-111, or 10-5-111.5, every insured under a contract procured from an unauthorized insurer shall pay to the division of insurance before March 1 next succeeding the calendar year in which the insurance was so effectuated, continued, or renewed a premium tax of three percent of net premiums charged for the insurance. Such insurance on subjects resident, located, or to be performed in this state procured through negotiations or an application, in whole or in part occurring or made within or from within or outside of this state, or for which premiums in whole or in part are remitted directly or indirectly from within or outside of this state, is deemed to be insurance procured, continued, or renewed in this state. The term "premium" includes all premiums, membership fees, assessments, dues, and any other consideration for insurance. If the tax prescribed by this section is not paid within the time stated, the tax is increased by a penalty of twenty-five percent and by the amount of an additional penalty computed at the rate of one percent per month or any part thereof from the date the payment was due to the date paid.

(2) If a policy covers risks or exposures only partially in this state, the tax payable shall be computed on the portions of the premium which are properly allocable to the risks or exposures located in this state.

(3) Proration of premium taxes due from an industrial insured under a contract procured from an unauthorized insurer having property in states other than Colorado shall be determined by rules and regulations promulgated by the commissioner using the following criteria where applicable:

(a) Percentage of physical assets in Colorado;

(b) Percentage of employee payroll in Colorado;

(c) Percentage of sales in Colorado;

(d) Percentage of taxable income reportable in Colorado.

Source: L. 67: p. 871, § 8. C.R.S. 1963: § 72-25-8. L. 2012: (1) amended, (HB 12-1215), ch. 104, p. 354, § 6, effective August 8. L. 2023: (1) amended, (HB 23-1111), ch. 46, p. 173, § 2, effective January 1, 2024.

Cross references: For the legislative declaration in HB 23-1111, see section 1 of chapter 46, Session Laws of Colorado 2023.