Arizona establishes new penalties for late surplus lines tax payments
The Arizona Department of Insurance has established new civil penalties if a surplus lines broker fails to remit the surplus lines tax provided for by state statute 20-416 based on the amount of tax overdue.
According to the department, up until now, it has levied a $25 daily penalty rate regardless of the amount of tax due. When the amount of delinquent tax was small, the civil penalties were disproportionate to the amount owed. To levy a daily rate that more closely correlates to the amount of tax due, the department has established a standard daily penalty rate that will apply to all future assessments for delinquent surplus lines tax payments.
For delinquent surplus lines tax amounts of $12,499.99 or less, the penalty rate is 20 cents for each $100 in late tax payment, per day. For amounts $12,500 or greater, the department will continue to assess a $25 daily penalty rate.
- A delinquent surplus lines tax amount of $500 would have a $1 per day penalty rate.
- A $1,000 delinquent surplus lines tax amount would have a $2 per day penalty rate.
For more information, call Kelly Stephens, financial affairs division of the Arizona Department of Insurance at (602) 364-3998.