(a)(1) There is hereby levied a tax of three per centum (3%) on all premiums charged for insurance which is placed with either an eligible surplus lines insurer, other than a risk retention group, or other nonadmitted insurer in accordance with this article, such taxes to be based on the gross premiums charged less any return premiums. This tax shall be in addition to the full amount of the gross premium charged by the insurer for the insurance. The tax on any unearned portion of the premium shall be returned to the insured.

(2) In the event that a placement of insurance involves subjects of insurance resident, located or to be performed in one or more states other than this Commonwealth, then the premium taxes provided for in this section shall be levied:

(d.1)(1) Each surplus lines licensee shall, on or before January 31 of each year, file a report of all premiums transacted from the placement of insurance with either an eligible surplus lines insurer or other nonadmitted insurers during the previous calendar year. The report shall be filed as prescribed by the Department of Revenue with any payment. A full copy of the report shall be filed with the department by the surplus lines licensee.

(2) The report described under this subsection shall set forth the name of the insured, the home state of the insured, if required by the department, identification of the insurer, the type of insurance, gross premiums charged less any return premiums allowed, the tax due as provided in this section and any other information as required by the Department of Revenue. A surplus lines licensee that is a business entity licensee which files the annual premium tax return with the Department of Revenue shall include in its return the premium taxes generated during the year subject to reporting by all licensees associated with said business entity during the reporting period. The report shall be made on forms prescribed by the Department of Revenue.

(3) The remittance for the taxes due shall accompany the report described under this subsection. Neither the surplus lines licensee nor the writing producer shall pay directly or indirectly the tax or any portion of the tax, either as an inducement to the insured to purchase the insurance or for any other reason. The surplus lines licensee shall collect from the insured or the writing producer the amount of the tax at the time of delivery of the initial policy, cover note or other evidence of insurance or at the time thereafter as is reasonably consistent with normal credit terms customary in the business.

(4) A penalty shall be imposed for failure to file the report required under this subsection on or before the due date in accordance with the rules of section 403(d) of the act of March 4, 1971 (P.L. 6, No. 2),¹ known as the “Tax Reform Code of 1971.”