Who is responsible for paying Insurance Premium Tax?

The responsibility for paying the Insurance Premium Tax typically falls on the insured. When an insurance policy is purchased, the insured is ultimately the party that pays the premiums for coverage. The insurer may collect the tax as part of the premium amount when billing the insured, but it is the insured’s responsibility to ensure this tax is paid.

In practice, while the insurer manages the collection and remittance of the tax, the burden of cost lies with the insured as part of their overall obligation to pay for the insurance coverage. This system aligns with how taxes operate in relation to purchased goods and services, wherein the consumer is accountable for the associated tax. In terms of the roles within the insurance transaction, the insured is positioned as the primary entity responsible for covering all costs associated with their policy, which includes the Insurance Premium Tax.