Definition - What does Premium Tax mean?
A premium tax is a tax that insurers often have to pay on the premiums that they receive from their policyholders. The tax varies from state to state, so the exact amount that insurers have to pay for premium taxes can vary widely across regions.
Insuranceopedia explains Premium Tax
Premium taxes are just one of many government regulations that insurance companies have to comply with. Understanding the amount insurance companies will have to pay for premium taxes is a crucial aspect of their financial planning.