KRS 304.11-050: Premium tax on unauthorized insurer.

(1) Effective with all premiums collected during the calendar year 1968, except

premiums on lawfully procured surplus lines insurance, every unauthorized insurer

shall pay to the secretary of revenue before March 1, next succeeding the calendar

year in which t he insurance was so effectuated, continued, or renewed, a premium

tax of two percent (2%) of gross premiums charged for such insurance on subjects

resident, located, or to be performed in this state. The insurance whether procured

through negotiation or an application, in whole or in part occurring or made 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, shall be deemed to be

insurance procured or continued i n 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 shall be increased by a penalty of twen ty-five percent (25%) and by the amount

of an additional penalty computed at the rate of one percent (1%) per month or any

part thereof from the date the payment was due to the date paid.

(2) If the policy covers risks or exposures only partly in the state , the tax payable shall

be computed on the portions of the premium which are properly allocable to the

risks or exposures located in the state. In determining the amount of premiums

taxable in this state, all premiums written, procured, or received in this state and all

premiums on policies negotiated in this state shall be deemed written on property or

risks located or resident in this state, except those premiums as are properly

allocated or apportioned and reported as taxable premiums to any other state or

states.

(3) Proration of premium taxes due from those insureds specified in KRS 304.11 -020

under a contract procured from an unauthorized insurer having property in states

other than Kentucky, shall be determined by administrative regulations promulgated

by the secretary of revenue using the following criteria where applicable:

(a) Percentage of physical assets in Kentucky;

(b) Percentage of employee payroll in Kentucky;

(c) Percentage of sales in Kentucky; and

(d) Percentage of taxable income reportable in Kentucky.

(4) The secretary of revenue, or the Attorney General upon request of the secretary of

revenue, shall proceed in the courts of this state or any other state or in any federal

court or agency to recover tax not paid within the time prescribed in this section.