Tax Forms, Instructions & Information
Click here for all California Department of Insurance Tax Forms:
Quick links to the following surplus line broker tax forms and information:
Please note, the following Tax Form, Tax Form Instructions, Tax Payment Voucher, and Tax Calendar are hosted on the California Department of Insurance's website. We provide links to these forms as a service to our membership.
2019 Surplus Line Broker and Special Lines Surplus Line Broker Tax Return Form
2019 Surplus Line Broker and Special Lines Surplus Line Broker Tax Return Instructions
Surplus Line Broker's Monthly Tax Payment Voucher Form
Please note: For individuals endorsed and only transacting through the business entity license, you do not need to complete the zero premium tax form if you are listed as an endorsee under the business entity tax form.
Zero Tax Return Surplus Line Broker and Special Lines Surplus Line Broker Form
Zero Tax Return Surplus Line Broker and Special Lines Surplus Line Broker Form Instructions
Surplus Line Broker and Special Lines Surplus Line Broker Tax Calendar
Every surplus line broker and special lines surplus line broker must make an annual state tax filing. This filing is due to the Insurance Commissioner on or before March 1st of each year. The amount of tax due is 3% of the California taxable surplus line premiums transacted by the broker from January 1st to December 31st in the previous year. This form must be completed by all brokers, regardless of whether business was transacted. Individually licensed and endorsed surplus line brokers who transact or write business solely on behalf of a surplus line organization are no longer required to file an individual Zero Premium Tax Return. Instead, 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. Any questions regarding the completion of the Annual Statement and Tax Return please contact the California Department of Insurance, Premium Tax Audit Bureau by e-mail at firstname.lastname@example.org.
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 on account, of the annual tax on business done during the current calendar year. The Commissioner may relieve a surplus line broker of the obligation to make monthly payments in situations where the broker establishes, to the satisfaction of the Commissioner, that the broker has ceased to transact business in this state, or that the annual tax for the current year will be less than $20,000. The monthly payments shall be remitted on or before the first day of the third calendar month that follows the end of the accounting month in which the business is transacted.
Brokers whose annual tax exceeds $20,000 are required to participate in the electronic funds transfer (EFT) program. To register as an EFT taxpayer, contact the CDI’s EFT Unit at: (916) 492-3288.
Failure to pay state tax will result in a penalty of 10% of the amount of payment due, plus an interest rate of 1% per calendar month (or fraction thereof) until the date the payment is received by the Commissioner.
(See section 1775.1 through 1776. of the Insurance Code here.)
The services performed by the SLA are funded by a stamping fee assessed for each declaration page, cover note, or other document bearing premium submitted to the SLA. The fee is based on a percentage of the premium charged. The stamping fee percentage is determined by the Stamping Committee, and approved by the Board of Directors. The stamping fee rate has varied from 1/10 of 1% (or .1%) to 5/10 of 1% (or .5%) over the last 20 years. See the table below for a schedule of stamping fee rates.
Payment of Fee
Each month, all surplus line brokers receive a monthly invoice that must be signed and returned to the SLA. For the filing broker, the invoice shows the outstanding stamping fee(s) and is accompanied by a detailed policy activity report listing all the documents that were processed for the preceding month. The filing broker must immediately return the invoice with a check for fees due.
If the monthly stamping fee is a negative amount (as a result of returned premiums, cancellation of policies, adjustments, and/or corrections to filings), it will be credited to the broker’s account or refunded upon request. NOTE: As of May 1, 2013, a signature is no longer required on the remittance copy of the SLA invoice. However, the original invoice or a copy must be remitted with payment.
Should there be a discrepancy and/or adjustment on an item billed, the broker should pay the billed amount and clearly document where the discrepancy occurred on the policy detailed activity report. The adjustment will appear on the month in which the correction was made.
If any surplus line broker is more than 60 days delinquent in the payment of such fees, a series of follow up letters will be sent in regard to continually outstanding fees before the matter is referred to the California Department of Insurance.