Surplus Lines Tax Rates by State: The Complete Broker Comparison

Surplus lines tax rates by state determine the actual cost your client pays above the E&S base premium. Rates run from 1.0% in Iowa to 6.0% in Alabama, Kansas, Kentucky, and Oklahoma. Four states - California, Texas, Florida, and New York - add stamping fees on top, bringing their total effective rate above the headline tax rate. On a $200,000 E&S policy, the difference between placing in Iowa (1.0%) and Alabama (6.0%) is $10,000 in tax. Under the NRRA, the insured's home state rate applies to the entire premium regardless of where the risk sits.

Key Takeaways

• Rates range from 1.0% (Iowa) to 6.0% (Alabama, Kansas, Kentucky, Oklahoma); the weighted US average is approximately 3.8% (NAIC 2024)
• Four major stamping office states add fees: CA (+0.25%), FL (+0.30%), TX (+0.10%), NY (+$0.04/$100 premium)
• Florida's combined 5.30% (5.0% tax + 0.30% FSLSO fee) is the highest effective rate of any high-volume state
• Virginia's 1.50% is the lowest rate among the top-10 surplus lines premium states
• Under the NRRA home state rule, a Texas-headquartered company with operations in five states pays only Texas tax on 100% of premium
• Stamping fees go to the private stamping office nonprofit; tax revenue goes to the state general fund - they are separate charges collected together

Complete 50-State Surplus Lines Tax Rate Table

Sources: Individual state DOI rate schedules; NAIC surplus lines tax rate survey; SLA, FSLSO, ELANY, and SLTX fee schedules (2025–2026). Verify current rates before filing - states adjust rates with legislative sessions.

How to Calculate Surplus Lines Tax: Four Worked Examples

These examples all use a $50,000 gross premium general liability policy. The home state determines the rate under the NRRA.

California (home state: CA)

• Tax: $50,000 × 3.00% = $1,500
• SLA/SLIP stamping fee: $50,000 × 0.25% = $125
• Total tax and fees: $1,625
• File through SLIP portal within 30 days of binding

Texas (home state: TX)

• Tax: $50,000 × 4.85% = $2,425
• SLTX stamping fee: $50,000 × 0.10% = $50
• Total tax and fees: $2,475
• File through SLTX portal within 90 days of binding

Florida (home state: FL)

• Tax: $50,000 × 5.00% = $2,500
• FSLSO stamping fee: $50,000 × 0.30% = $150
• Total tax and fees: $2,650
• File through FSLSO portal within 30 days of binding

New York (home state: NY)

• Tax: $50,000 × 3.60% = $1,800
• ELANY stamping fee: $50,000 × 0.04% = $20
• Total tax and fees: $1,820
• File through ELANY portal within 60 days of binding

The spread on the same $50,000 policy runs from $1,625 (California) to $2,650 (Florida) - a $1,025 difference driven entirely by home state.

States With the Highest and Lowest Rates

Highest rates (above 5.0%):

High rates in Alabama, Kansas, Kentucky, and Oklahoma reflect state legislative choices about taxing non-admitted premium. These are not high-volume surplus lines markets - the NAIC ranks them outside the top 15 by premium volume - so the rate has less impact on the overall E&S market than Florida's 5.30% combined rate on $21.3 billion in annual premium.

Lowest rates (below 2.0%):

Virginia stands out: 1.50% is the lowest rate among the top-10 surplus lines states by premium volume. A commercial risk headquartered in Virginia on a $500,000 E&S policy pays $7,500 in tax vs. $26,500 in Florida on the same premium.

Why rates differ: Surplus lines tax rates are set by state legislatures through insurance code amendments. States with larger non-admitted markets (Florida, Texas) have political incentive to keep rates moderate to support industry activity. States with limited surplus lines activity set rates based on historical convention rather than market competition. No federal floor or ceiling exists for state surplus lines tax rates.

Stamping Fee vs. Tax: What Goes Where

Brokers must understand the legal distinction between the stamping fee and the surplus lines tax, even though both are collected from the policyholder at the same time.

Surplus lines tax is a state revenue assessment. It flows to the state's general fund or a designated insurance regulatory fund. The legal authority comes from the state insurance code. The state DOI enforces collection.

Stamping fee is a service charge assessed by the stamping office - a private nonprofit organization created under state law. The fee funds the stamping office's operating costs: portal maintenance, staff to review filings, carrier eligibility monitoring, and public records. The state does not receive stamping fee revenue.

Both charges appear as line items on the insured's invoice. Both are calculated as a percentage of gross premium (or, in ELANY's case, a flat rate per $100 of premium). Both are non-negotiable.

The broker remits the tax to the state (or through the stamping office portal, which then distributes the tax to the state) and the stamping fee to the stamping office.

Multi-State Risk Allocation Under the NRRA

For a commercial risk with operations in multiple states, the NRRA home state rule determines which state's tax rate applies.

Scenario: Construction company, HQ in Texas, projects in 5 states

Under the NRRA, the broker applies the Texas rate to the full $500,000 premium. California, Florida, New York, and Georgia receive no tax. The broker files one return with SLTX.

Determining home state for a holding company: Use the state where management directs and controls operations - not the state of incorporation. A Delaware-incorporated company with its executive team in Georgia is a Georgia home state. The determination should be documented in the placement file with supporting evidence (lease, utility bills, executive directory).

For complete NRRA guidance, see NRRA Surplus Lines Tax Allocation.

How Illinois Surplus Lines Tax Works

Illinois is the fifth-largest surplus lines market by premium volume. Brokers file through the Illinois Surplus Lines Association (ILSFA) at a 3.50% tax rate plus a 0.10% stamping fee, for a combined 3.60% effective rate.

Filing process: Submit each transaction through the ILSFA online portal within 60 days of binding. ILSFA reviews the filing for carrier eligibility, correct premium base, and diligent search documentation. ILSFA also requires annual reconciliation with the Illinois DOI.

Payment: The Illinois DOI collects the state tax through quarterly returns. The ILSFA stamping fee is paid at the time of filing through the ILSFA portal.

Late filing: ILSFA charges $50 per transaction for filings beyond the 60-day window, plus the Illinois DOI may assess additional penalties on the tax portion.

FAQ

Does surplus lines tax vary by state?

Yes. Rates range from 1.0% (Iowa) to 6.0% (Alabama, Kansas, Kentucky, Oklahoma). Every state sets its own rate through the state insurance code. The NRRA home state rule means the insured's home state rate applies to 100% of the premium regardless of where the risk is located. A Texas-headquartered company pays Texas's 4.95% combined rate on all its E&S premium, even for property in California or Florida.

How do you calculate surplus lines tax?

Multiply the gross premium by the insured's home state surplus lines tax rate. Add the stamping fee if the home state has one. Example: $75,000 premium, home state California = $75,000 × 3.00% = $2,250 tax + $75,000 × 0.25% = $187.50 stamping fee = $2,437.50 total. For multi-state risks, apply the full premium to the home state rate - no allocation to other states.

How do you file Illinois surplus lines tax?

File each transaction through the ILSFA (Illinois Surplus Lines Association) online portal within 60 days of binding. The combined rate is 3.60% (3.50% tax + 0.10% ILSFA stamping fee). Annual reconciliation returns are due to the Illinois DOI by March 1. The ILSFA portal validates carrier eligibility and tax calculation at submission.

What is Florida surplus lines tax?

Florida's surplus lines tax is 5.0% of gross premium. The FSLSO (Florida Surplus Lines Service Office) adds a 0.30% stamping fee, bringing the total effective rate to 5.30%. File through the FSLSO portal within 30 days of binding. Florida generated $21.3 billion in surplus lines direct written premium in 2024, making it the third-largest surplus lines market nationally (NAIC 2024 data).

What is insurance surplus lines tax?

Insurance surplus lines tax is a state tax on premiums placed with non-admitted carriers. It exists because non-admitted carriers do not pay state premium tax the way admitted carriers do. The broker collects the tax from the policyholder and remits it to the state. Tax rates range from 1.0% to 6.0% depending on the insured's home state.

What is FL surplus lines tax?

Florida's surplus lines tax is 5.0% of gross premium. The FSLSO stamping fee adds 0.30%, bringing the total to 5.30%. On a $50,000 E&S policy with a Florida home state, the policyholder pays $2,500 in tax plus $150 in stamping fees. File through the FSLSO portal at fslso.com within 30 days of the policy effective date. Late filings incur a 10% penalty per month, capped at 50% of the unpaid tax.

Written by Javier Sanz, Founder of BrokerageAudit. Last updated April 2026.

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