Section 618.43. Taxation of insurance written by unauthorized insurers.

 

(1)   Business subject to taxation.

(a) Subject to par. (bc) , insurers, agents, brokers, and policyholders are liable, as provided in sub. (2) , for a premium tax of 3 percent of gross premiums charged for insurance, excluding annuities, if any of the following is satisfied:

1. The insurance is transacted under s. 618.41 (1) or 618.42 .

2. The insurance is transacted by an unauthorized insurer that is a risk retention group, including a foreign risk retention group authorized to provide health care liability insurance under s. 655.23 (3) (am) that has not been issued a certificate of authority under s. 618.12 .

3. The insurance is transacted by an unauthorized insurer for a risk purchasing group.

(bc) Notwithstanding any other provision of this section, with respect to premiums charged on policies issued or renewed on or after July 21, 2011, for insurance to which par. (a) applies, the tax under par. (a) is required only if the home state of the insured is this state, and it shall be levied on the entire gross premium charged, including premium attributable to those portions of the risk located outside of this state.

(c) If the tax required under this subsection is not paid within the time prescribed under sub. (3) , the commissioner shall impose a penalty of 25 percent, plus one percent per month from default until payment.

(d) Any insurance business transacted in violation of the law is subject to a premium tax of 5 percent of gross premiums charged for the insurance.

(2)   Payment of tax. The insurance agent or broker and the policyholder are jointly and severally liable for the payment of the tax required under sub. (1) on business written under s. 618.41 (1) , and the insurer, insurance agent or broker and policyholder are jointly and severally liable for the payment of any other tax required under sub. (1) . The tax shall ultimately be paid by the policyholder. Absorption of the tax by either the agent or broker or the insurer is an unfair method of competition under s. 628.34 (2) (b) .

(3)   Accounting and reporting. The commissioner shall by rule prescribe accounting and reporting forms and procedures for insurers, agents or brokers and policyholders for the purpose of determining the amount of the taxes owed, and the manner and time of payment.

(4)   Applicability of tax law. Section 76.68 is applicable to any tax payable under this section.

(5)   Exclusive nature. The tax under this section is in lieu of all other taxes on insurance business and of fire department dues.

(6)   Allocation of tax. With respect to gross premiums charged on policies issued or renewed before July 21, 2011, if a policy covers risks that are only partially located in this state, the premium shall be reasonably allocated among the states on the basis of risk locations in computing the tax, except that all premiums received in this state or charged on policies written or negotiated in this state shall be taxable in full under this section, with a credit for any tax actually paid in another state to the extent of a reasonable allocation on the basis of risk locations.

(7)   Taxes as trust funds. All premium taxes collected under this section by an agent or broker or by an insurer are the property of this state, to be held in trust for the state.

(8)   Taxes as preferred claims. If the property of any agent or broker is seized upon any process in any court in this state, or when his or her business is suspended by the action of creditors or put into the hands of any assignee, receiver or trustee, all taxes and penalties due the state from him or her under this section are preferred claims and the state is to that extent a preferred creditor.

1971 c. 260 ; 1975 c. 371 s. 50 ; 1979 c. 102 ss. 148 , 237 ; 1987 a. 247 ; 2001 a. 65 ; 2011 a. 224 ; 2015 a. 55 . Cross-reference: See also ss. Ins. 6.17 and 6.19, Wis. adm. code.