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Timely payment of premium tax is a key aspect of surplus lines compliance. Unfortunately, the states have different tax calculation formulas, filing deadlines, and payment processes. Filers must also understand how to apply the Home State Rule to multi-state risks to determine the correct tax amount.
When tax payments are late or inaccurate, you can incur substantial penalties. Some states assess interest on unpaid premium taxes daily! It’s not surprising that many Property and Casualty producers cite fear of missing surplus lines tax filings as a major reason for avoiding the non-admitted market.
Optimized Process for Premium Tax Reports
ReSource Pro’s surplus lines experts know when each state requires premium tax reports – including “special circumstances” that can affect reporting deadlines. Using policy information and supporting documents uploaded via the SLIC portal, our processors verify the accuracy of premium tax calculations.
As monthly, quarterly, semi-annual, and/or annual report deadlines approach, our processors compile and submit tax reports and process premium tax payments. If an endorsement alters previously paid tax amounts, our experts submit supplemental tax reports and make additional tax payments or request refunds, as needed.
You receive regular reports via email that document premium tax filings. Corporate contacts can also track the progress submissions using SLIC’s Reports function. Additional accounts can be created to allow individual brokers to review only their submissions.
Convenient Premium Tax Payment Options
Many states require specific methods for the payment of premium taxes. Your surplus lines processor draws funds for tax payments directly from your preferred bank account and makes payments on your behalf. You always receive notification prior to such transactions.
For those few states that still prefer paper tax reports and physical checks, ReSource Pro lets you know exactly how much the check needs to be for and who it needs to be made out to. You return your signed tax report and check to us, and we take care of everything from there.
Whether electronic or on paper, you receive a copy of all filed reports and confirmations of receipt/processing for your records upon request. Also, if you find yourself the subject of a random audit, our surplus lines team is there for you. We keep backups of all filings and reports, payment receipts, and pertinent correspondence.
Some states require notification that you have not written business in their state during the reporting period. This requirement begins the moment your surplus lines license issues and continues until that license is surrendered appropriately. Additionally, some jurisdictions require both an individual and the business entity to hold an active surplus lines license – even though all transactions are filed exclusively under one license or the other.
ReSource Pro’s experts track where you hold active surplus lines licenses. In states that require zero reports, we can automatically submit the required reports on your behalf.