State Tax

The current state surplus line tax rate is 3%.

Gross premium as used in the calculation of premium taxes due, is the gross policy premiums plus any fees/charges pertaining to the policy such as policy fee, inspection fee, etc. For more information on which fees are subject to tax, please refer to California Department of Insurance Bulletin 80-6: Brokers’ Fees and other Similar Fees.

The link to the CDI tax forms is located on the Broker page of this website or you can visit the CDI's website: http://www.insurance.ca.gov/0250-insurers/0300-insurers/0100-applications/tax-forms-instruct-and-info/index.cfm.

California does not send invoices for payment of the state tax.  The broker is responsible for paying taxes on time.

Taxes are reported based on the invoice date.

Pursuant to California Insurance Code Section 1774(c), the date on which the surplus line broker transacting a policy prepares a bill or invoice for payment of all or part of the premiums due, shall be considered the date on which that business was done or transacted, subject to subdivision (d). This date shall be shown on the face of the bill or invoice and shall be referred to as the “invoice date.”

Refer to SLA Bulletin #1061 for more information.

Effective January 1, 2015, every surplus line broker whose annual tax for the preceding calendar year was $20,000 or more shall make monthly installment payments. Refer to CIC Section 1775.5 through 1776.

Yes. The amount paid each month must be reported on line 6 of the Annual Statement and Tax Return.

Brokers whose annual tax is over $20,000 are required to participate in the electronic funds transfer program. To register as an EFT taxpayer, contact the CDI's EFT Unit at: (916) 492-3288.

Every surplus line broker must make an annual state tax filing. The amount of state tax is 3% of the California taxable surplus line premium transacted by the broker, for California home state insureds, from January 1st to December 31st of the previous year. This form must be completed by all brokers, regardless of whether business was transacted.

All surplus line organizations are required to include a list of endorsed surplus line brokers who transacted business on their behalf, including each broker’s name and license number, with the organization’s Annual Statement and Tax Return.

For additional information regarding the filing of state tax returns, contact the California Department of Insurance Premium Tax Audit Bureau at premiumtaxaudit@insurance.ca.gov.

All surplus line brokers with active licenses not named on another surplus line broker's Annual Statement and Tax Return, and all special line brokers with active licenses who did not transact surplus line or special lines surplus line business, are required to file a Zero Premium Tax Return.

Individuals who are endorsed to a business entity license and hold an individual surplus lines bond must also file a Zero Premium Tax Return if they did not transact surplus line business under their individual license.

Brokers who delegated the responsibility for filing the Confidential Report of Placement (SL-1 form) to another surplus line broker(s) pursuant to Section 1774(b) of the California Insurance Code are not required to file a Zero Premium Tax Return. All delegated surplus line brokers are required to list those surplus line brokers who delegated this reporting function on their behalf, including each broker’s name and license number, on their Annual Statement and Tax Return.

All tax returns must be submitted directly to the California Department of Insurance. Send a scanned copy of the physically signed tax return and required attachments to PremiumTaxFiling@insurance.ca.gov.

No. The original, signed forms must be mailed to the address specified on the applicable tax form’s instruction page.

The “whole dollar rounding” only applies to the Tax Forms and tax payments filed with the Department of Insurance.

For more information, please see the “CDI FAQs for Whole dollar tax reporting” notice posted on the CDI 2023 Premium Tax Forms and Instructions website: https://www.insurance.ca.gov/0250-insurers/0300-insurers/0100-applications/tax-forms-instruct-and-info/2023/index.cfm.

Line 15 is for the calendar year  - even if the premium reported is non-taxable - and is for informational purposes only. The amounts reported may not necessarily reconcile with the other lines. However, the reasons for the differences should be noted on the return.

• Line A: Total amount of taxable and non-taxable Gross Premium (i.e., not including returned premiums) for California Home State Insureds
• Line B: Single State risks in California. For the most part, reconciles with Line 10 (single state gross premiums). Note any differences.
• Line C: Multi-State risks. The percentages should equal 100% of the total premium risk allocated to California and to each other state for the entire year. If percentages do not equal 100% due to non-U.S. risks or other reasons, please note in your tax return filing.

A report of the premium amount by insurer for the transactions that have been processed by the SLA is available in SLIP. In order to produce the report, log-in, click on the REPORTS tab and then click on Premium Amount by Insurer.

Choose the option to include transactions based on Broker Invoice Date.

Enter the date criteria and generate the report in the desired format (PDF, Excel, Word, or CSV).

*If you have a SLIP profile, but cannot see the Reports tab, you might not have the required permissions to view reports in SLIP. The Master User for the account is able to edit permissions.

No. The California Department of Insurance requires a wet signature in either black or blue ink.

The Annual Statement and Tax Return, with payment, must be sent to the California Department of Insurance, postmarked on or before March 1st following the end of the calendar year. When the due date falls on a Saturday, Sunday, or State or Federal legal holiday, the statement, tax return, and payment are considered timely if postmarked on the next business day. Please refer to the CIC Section 1775-1775.9.

If tax payments are made via EFT, Tax Payment Vouchers can be filed via e-mail to PremiumTaxFiling@insurance.ca.gov. For methods of making payments click here: https://www.insurance.ca.gov/0250-insurers/0300-insurers/0300-programs/0100-eft/Index.cfm.

For questions regarding the Electronic Funds Transfer (EFT) Program for Tax Payments, please contact the California Department of Insurance, Tax Accounting/EFT Unit at (916) 492-3288, e-mail at EFT@insurance.ca.gov.

The state tax is payable to the California Department of Insurance and the address is included in their tax return instructions. The stamping fee is paid to the Association after the broker receives an invoice from the Association.

No