underscored material = new
[bracketed material] = delete
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
SENATE BILL 520
57TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 2025
INTRODUCED BY
Martin Hickey
AN ACT
RELATING TO THE HEALTH INSURANCE PREMIUM SURTAX; EXCLUDING
DENTAL AND VISION ONLY CONTRACTS FROM THE SURTAX.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-40-3 NMSA 1978 (being Laws 2018,
Chapter 57, Section 3, as amended) is amended to read:
"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
.231075.1 underscored material = new
[bracketed material] = delete
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
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
.231075.1
- 2 - underscored material = new
[bracketed material] = delete
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
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 ] only, vision
only or dental and 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
.231075.1
- 3 - underscored material = new
[bracketed material] = delete
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
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"."
SECTION 2. EFFECTIVE DATE.--The effective date of the
provisions of this act is January 1, 2026.
- 4 -
.231075.1