In 2012 Colorado enacted legislation, HB12 – 1215 that brought it into compliance with the provisions of NRRA. These changes are reflected in revisions to both Article V, Non Admitted Insurance, and Regulation 2-4-1. The most current versions of these documents are available on this site.
Although Colorado retains the option to join a multi state tax sharing compact it has not elected to do so. Consequently all premium taxes pertaining to non admitted policies that have a “home state” status in Colorado should be paid to Colorado. This rule applies even if the insured has property or exposures in other states. Therefore the 3% tax should be calculated on 100% of the exposures associated with the policy and reported and paid to Colorado. Similarly any policy with a “home state” designation from another state is immune to Colorado reporting or tax.
The majority of states have adopted rules that require surplus lines premium taxes on any insured with a “home state” status to be paid only to that state. This approach, known as single situs, will greatly simplify the reporting and payment of surplus lines taxes as producers will not have to be concerned with apportioning taxes to multiple states.
Effective May 2015 Colorado issued a letter clarifying the position of the state as respects compliance with NRRA. The DOI has modified its position as respects insured’s who’s home state is not Colorado. In the event that there are no exposures in the home state and the majority of the exposures are located in Colorado then Colorado will now require that producers report 100% of the premium for all locations to Colorado. Previously only the Colorado exposures were subject to taxation.
