Bill
HB 4152
The bill revises premium taxes and adds a new 0.4312% vehicle insurance tax, updates exemptions and credits, expands electronic filing, and strengthens tax confidentiality and data
HB 4152 (57th-2nd Regular Session, Arizona) – Taxation Omnibus (2026-2027)
Summary purpose
- Reforms multiple state tax provisions and related administration, with a focus on adjusting premium taxes, expanding electronic filing, updating definitions, and aligning various tax credits and exemptions across several tax types and industries.
Key provisions and changes
1) Premium tax framework (Section 20-224; related changes)
- Insurers must file annually by March 1 a detailed report of net direct premium income from all lines of business earned in Arizona, with specified deductions (cancellations, returning premiums, policyholder refunds, and similar returns). Cash surrender values are not deductible; annuity considerations and premium deposits’ unabsorbed portions are excluded from total direct premium income and not taxed.
- Premium tax rates (subsection B) include:
- Fire insurance: 0.66% for property located in cities certified as procuring private fire services; 2.2% otherwise.
- Disability insurance: 2.0%.
- Health care service plans: rates per other sections (20-837, 20-1010, 20-1060).
- Other insurance: tiered rates by calendar year (2016: 1.95%; 2017: 1.90%; 2018: 1.85%; 2019: 1.80%; 2020: 1.75%; 2021+ : 1.70%).
- Eighty-five percent of fire-related tax receipts are allocated to municipal or fire district retirement systems as described, with allocations varying by whether the area has volunteer vs. paid firefighters, and subject to actuarial reallocation.
- Provisions allow premium tax credits for eligible credits (from other sections) and provide refunds for excess fire premium taxes paid in error.
- Monthly electronic submission may be required starting after 2017 if the Director approves, with lists of acceptable third-party services on the department website.
- Title insurance is excluded from this premium tax (treated under 20-1566).
2) Vehicle-related premium tax (Section 20-224.01)
- Adds a separate 0.4312% tax on net premiums from vehicle insurance, payable with the 20-224 filing.
- Funds flow: to the Public Safety Personnel Retirement System (PSPRS) highway patrol account; excess funds flow to the Arizona Highway Patrol Fund as needed.
- Penalties apply for late payments; credits unavailable for this section.
3) Repeal of Section 20-224.03
- Repeals the previously existing premium tax credit provision (now moved/absorbed into other credit sections).
4) Tax exemptions and sector-specific taxes (Sections 20-837; 20-1010; 20-1060; 20-1097.07)
- Updates and maintains existing exemptions and credits for healthcare-related organizations, prepaid dental plans, and prepaid legal insurers, including potential premium tax credits where eligible.
5) Administrative and disclosure updates (Sections 28-2154.01; 41-1520; 42-1001; 42-2003; 42-5029)
- Electronic recordkeeping and reporting requirements for vehicle and international operations center programs; expands definitions for electronic communications, confidentiality, and data-sharing restrictions.
- Modernizes confidentiality rules for tax information, allowing disclosures to certain agencies and for administrative purposes, while clarifying public availability and data security.
- Rules for remittance, distribution, and accounting of tax revenues across municipalities, counties, and the state general fund; outlines distribution formulas and annual appropriations.
Who is affected
- Insurance companies issuing property, casualty, health, disability, and other lines in Arizona; title insurers excluded from 20-224 premium tax.
- Vehicle insurers (via the new 0.4312% tax) and highway patrol/PSPRS funding recipients.
- Health care service organizations, prepaid dental plan organizations, prepaid legal insurance providers, and other premium-tax-payer entities.
- Municipalities, counties, and state agencies that receive and manage distributions of tax revenues.
- Motor vehicle dealers, online lodging marketplaces and related taxpayers affected by broader confidentiality and reporting changes.
Timeline and procedural notes
- Annual premium tax reports due March 1; monthly payments and reporting may be required for high-volume insurers (March–August) with 15%-of-previous-year annual payment.
- Electronic submission can be mandated by the Director of the Department of Insurance and Financial Institutions starting December 31, 2017, subject to posting acceptable third-party services.
- Various sections involve ongoing reporting to the Joint Legislative Budget Committee and the Governor’s Office of Strategic Planning and Budgeting.
Overall impact
- The bill consolidates and adjusts premium tax rates, expands electronic filing, clarifies allocation of fire insurance taxes to retirement funds, introduces a separate vehicle insurance tax, repeals an existing credit, and strengthens confidentiality and data-sharing rules across tax administration. It broadens administrative efficiency while preserving or adjusting funding streams for public safety and municipalities.
Compiled from official sources — confirm details with the bill’s official record.
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