NMSA 1978, § 7-40-3 — 7-40-3

Imposition and rate of tax; denomination of "premium tax",
"health insurance premium surtax" and "self-insured group tax".

# A.

The tax imposed pursuant to this subsection may be referred to as the "premium
tax". The premium tax is imposed at a rate of three and three-thousandths percent of
the gross premiums and membership and policy fees received or written by a taxpayer
or, with respect to a taxpayer that is an insured that procures, continues or renews
insurance with a nonadmitted insurer, paid by the taxpayer, on insurance or contracts
covering risks within the state during the preceding calendar year. The premium tax
shall not be imposed on self-insured groups or on return premiums, dividends paid or
credited to policyholders or contract holders and premiums received for reinsurance on
New Mexico risks.

# B.

For a taxpayer that is an insurer lawfully organized pursuant to the laws of the
Republic of Mexico, the premium tax shall apply solely to the taxpayer's gross premium
receipts from insurance policies issued by the taxpayer in New Mexico that cover
residents of New Mexico or property or risks principally domiciled or located in New
Mexico.

# C.

With respect to a taxpayer that is a property bondsman, "gross premiums" shall
be considered any consideration received as security or surety for a bail bond in
connection with a judicial proceeding.

# D.

The premium tax provided in Subsection A of this section is imposed on the
gross premiums received of a surplus lines broker, less return premiums, on surplus
lines insurance where New Mexico is the home state of the insured transacted under
the surplus lines broker's license, as reported by the surplus lines broker to the
department on forms and in the manner prescribed by the department. For purposes of
this subsection, "gross premiums" shall include any additional amount charged the
insured, including policy fees, risk purchasing group fees and inspection fees; but
"premiums" shall not include any additional amount charged the insured for local, state
or federal taxes; regulatory authority fees; or examination fees, if any. For a surplus
lines policy issued to an insured whose home state is New Mexico and where only a
portion of the risk is located in New Mexico, the entire premium tax shall be paid in
accordance with this section.

# E.

In addition to the premium tax, except as provided in Subsection F of this section,
a health insurance premium surtax is imposed at a rate of three and seventy-five
hundredths percent of the gross health insurance premiums and membership and policy
fees received by the taxpayer on hospital and medical expense incurred insurance or
contracts; nonprofit health care plan contracts, excluding dental or vision only contracts;
and health maintenance organization subscriber contracts covering health risks within
this state during the preceding calendar year. The surtax shall not apply to return health
insurance premiums, dividends paid or credited to policyholders or contract holders and
health insurance premiums received for reinsurance on New Mexico risks. The surtax
imposed pursuant to this subsection may be referred to as the "health insurance
premium surtax".

# F.

If an act of the United States congress is signed into law that imposes the annual
fee on health insurance providers pursuant to Section 9010 of the federal Patient
Protection and Affordable Care Act, or that imposes a substantially similar fee on the
same class of taxpayers, the rate of the health insurance premium surtax shall be
decreased at a rate equal to the rate of the annual fee imposed; provided that the rate
of the health insurance premium surtax shall not be less than one percent. A reduction
in the health insurance premium surtax pursuant to this subsection shall go into effect
on the later of the effective date of the imposition of the federal annual fee or ninety
days after the congressional act imposing the federal annual fee is signed into law.

# G.

A tax is imposed at a rate of nine-tenths percent on the net premiums, as defined
in the Group Self-Insurance Act, received or written by a self-insured group within the
state during the preceding calendar year. The tax imposed pursuant to this subsection
may be referred to as the "self-insured group tax".