Guides
Surplus lines taxes, stamping fees and diligent search
How surplus lines premium tax, stamping fees and diligent search work under the NRRA, with 2026 rates for several states and a worked example of the invoice.
When a surplus lines insurer writes your policy, the invoice carries a state premium tax and often a stamping fee on top of the premium, and the surplus lines broker is responsible for collecting them and filing the placement with the state. Under the federal Nonadmitted and Reinsurance Reform Act, only your home state, the state of your principal place of business, can require that tax for a multistate policy. Rates are set by each state, so they run from under 2% to nearly 6% of premium in the states we track.
The legal base: the NRRA
The Nonadmitted and Reinsurance Reform Act of 2010 (NRRA) is Title V, Subtitle B of the Dodd-Frank Act, codified in 15 U.S.C. 8201 through 8206 and, for reinsurance, 8221 and 8222. Four parts matter for surplus lines taxes and filings.
- Home state rules. Only the insured's home state may require a surplus lines broker to be licensed or collect premium tax for a placement (15 U.S.C. 8201 and 8202). For a policy covering locations in several states, the home state taxes the whole premium, and states can agree on how to share it. Some states have joined a compact for allocating the tax among states; confirm with your broker whether yours participates.
- Uniform eligibility. States generally cannot add their own eligibility rules for a U.S.-domiciled nonadmitted insurer beyond the NAIC's model act, and they may not bar a non-U.S. insurer listed on the NAIC Quarterly Listing of Alien Insurers (15 U.S.C. 8204). NAIC Model 870 (2023) sets a $15 million minimum capital and surplus for eligible surplus lines insurers.
- Streamlined placement for sophisticated buyers. The diligent-search requirement does not apply to an exempt commercial purchaser if the broker disclosed that coverage may be available from admitted insurers and the buyer requested a nonadmitted placement in writing (15 U.S.C. 8205). The definition in 8206 requires, among other things, more than $100,000 in annual commercial premiums, plus tests such as net worth above $20 million, revenue above $50 million or 500 or more employees, with some amounts indexed every five years. A typical small business will not qualify.
- No double taxation. A multistate placement should produce one tax filing, not one per state.
See excess and surplus lines insurance explained for the market itself and How business insurance is regulated in the U.S. for the wider framework.
What the invoice shows
A surplus lines invoice usually has these lines. Names vary by state.
| Line | What it is | Who sets it |
|---|---|---|
| Premium | The insurer's charge, which may include a minimum earned premium | Insurer |
| Surplus lines tax | State premium tax on the nonadmitted placement | State statute |
| Stamping fee or filing fee | Cost of the stamping office or association that reviews and records the filing | Association or statute |
| Broker fee or policy fee | Compensation for the wholesale or retail broker | Broker, if state allows |
| Other surcharges | Fire marshal tax, fire-fighting fund, property insurance association fees | State statute |
Many states bar a broker from absorbing or rebating the tax, and some bar broker fees outside the policy premium. Check how your state treats fees.
Examples of 2026 rates
These are the rates in the state guides on this site as of October 2026; always confirm with the state before relying on one. Each state taxes the home-state insured's premium.
| State | Surplus lines tax | Stamping or service fee |
|---|---|---|
| Alabama | 6% | None noted |
| Missouri | 5% of net premium | None noted |
| New Jersey | 5% of total premium | No stamping office |
| North Carolina | 5% of gross premium | 0.3% stamping fee (NCSLA, policies effective on or after January 1, 2023) |
| Florida | 4.94% premium receipts tax | Service Office fee 0.03% for policies effective on or after July 1, 2026 |
| Louisiana | 4.85% | None noted |
| Texas | 4.85% | 0.04% stamping fee |
| Georgia | 4% | None noted |
| Massachusetts | 4% | None noted |
| New York | 3.6% | 0.15% (ELANY) for policies incepting in 2026, rising to 0.17% on or after January 1, 2027 |
| Illinois | 3.5% | 0.04% (Surplus Line Association of Illinois) |
| California | 3% | 0.18% (SLA, unchanged since January 1, 2023) |
| Colorado | 3% of net premium | None noted |
| District of Columbia | 2% | None noted |
| Idaho | 1.5% | 0.5% stamping fee (Surplus Line Association of Idaho estimator, 2026) |
| Mississippi | 4% | 0.25% stamping fee plus a 3% windstorm association fee (MSLA) |
| Nevada | 3.5% | 0.4% review fee (NAC 685A.370) |
| Pennsylvania | 3% | Flat $20 per filing, $45 if filed more than 45 days late (PSLA) |
| Washington | 2% | 0.30% stamping fee for policies incepting from January 1, 2025 (SLAW) |
| Minnesota | 3% | 0.04% stamping fee (SLAM) |
Some states add other charges. Kentucky has a 3% surplus lines tax plus a premium surcharge and a local government tax; Michigan adds a 0.5% regulatory fee to a 2% tax; Montana adds a 2.5% fire tax on the fire portion of premium. Sources are cited in each state guide.
Filings: who does what
The surplus lines broker's job is more than selling. In most states, the licensed surplus lines broker or producer:
- Confirms the insurer is eligible in the state (on the state's list or the NAIC alien insurer quarterly listing).
- Performs and documents the diligent search, unless an exemption applies.
- Delivers the policy with any required disclosures, such as notice that the insurer is not licensed in the state and that no guaranty fund covers it (guaranty fund).
- Files the placement, often with a stamping office or electronically, within the state's deadline, which varies by state.
- Collects the tax and remits it on the state's schedule: quarterly, semiannual or annual depending on the state.
Late filings usually cost the broker penalties and, in some states, interest. Taxes unpaid by the broker can still be the insured's problem in a few states, so ask whether the broker has remitted.
Diligent search
A diligent search (or "diligent effort") is the broker's documented attempt to place the risk with admitted insurers before going to surplus lines. Many states require declinations from a set number of admitted insurers, often three, and some limit the search to insurers that write the class of business. Florida repealed its diligent-effort requirement in HB 1549, signed June 13, 2025, so the rule has moved. Others keep exemptions for lines that the state has deemed "export-eligible" and for exempt commercial purchasers. Your retail or wholesale broker will keep the declinations in the file, and a small business should ask to see them if a policy was placed in the surplus lines market. See diligent search and wholesale brokers and surplus lines placement: how hard risks get insured.
A hypothetical invoice
Say a Texas restaurant bar buys a liquor liability policy through a surplus lines broker at a $50,000 premium. At the 2026 Texas rates in the table above, the tax is 4.85% of $50,000, which is $2,425, and the stamping fee at 0.04% is $20. Before any broker or policy fee, the total due is $52,445. If the same premium were placed for a New York insured under 2026 rates, the tax would be 3.6% ($1,800) plus the 0.15% ELANY fee ($75). If the restaurant also has a location in Louisiana, Texas, as home state, would still be the state that taxes the whole premium; the Louisiana rate does not apply. Fees outside the policy may be taxable in some states and not others.
Key takeaways
- Under the NRRA, the insured's home state alone regulates and taxes a nonadmitted placement; the broker files and pays.
- Tax rates vary widely, from 1.5% in Idaho to 6% in Alabama, plus stamping and service fees in many states.
- Read the invoice: tax, stamping fee, broker fee and any surcharges should be itemized, and rebating the tax is barred in many states.
- Diligent search is required in many states unless you are an exempt commercial purchaser; Florida repealed its requirement in 2025.
- Surplus lines policies generally have no guaranty fund behind them, so check the insurer's financial strength yourself.