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. A $5,000 delinquent amount would have a $10 per day penalty rate. A $10,000 delinquent tax amount would have a $20 per day penalty rate. And a $12,500 or greater delinquent surplus lines tax amount would have a $25 per day penalty rate.
For more information, call Kelly Stephens, financial affiars division of the Arizona department of insurance at (602) 364-3998.
Was this article valuable?
Here are more articles you may enjoy.