Texas offers temporary premium tax amnesty for non-admitted captives

The Texas Comptroller of Public Accounts has announced the launch of an insurance premium tax amnesty programme for non-admitted captive insurance companies and their insureds.

Texas imposes an unauthorised insurance premium tax of 4.85% on gross premiums charged by non-admitted insurers, including non-Texas licensed captives, for insurance covering people, property or activities located in the state.

If a captive insurer does not pay the tax when due, the insured also becomes jointly responsible for the tax.

In an announcement, the Comptroller said the temporary amnesty is being offered to non-Texas licenced captive insurance companies and their insureds who want to voluntarily comply with the state’s insurance premium tax laws. The lookback period for this temporary amnesty will be four years and penalties and interest will be waived.

The Comptroller’s office will notify certain franchise taxpayers that may be affiliated with a non-admitted captive insurance company. However, the Comptroller added that taxpayers do not need to receive a notice to be eligible for the amnesty programme. If such a notice is received and you are not affiliated with a non-admitted captive insurance company, no further action is necessary.

Those interested in the amnesty can file forms 25-108 and 25-123, Texas Annual Unauthorised Insurance Tax Report and its supplement, for insurance tax years 2022, 2023, 2024, and 2025. These years cover insurance written from 1 January 2022, through 31 December 2025. The forms must be filed by 31 December 2026 to qualify for the temporary amnesty. The forms are available at comptroller.texas.gov/taxes/insurance/forms.

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