Unless subject to exemption, all surplus line policies are assessed surplus line tax (as well as stamping fee and, in some cases, fire marshal tax). The surplus line tax imposed by the State of Illinois is currently 3.5% of the premium, rounded to the nearest whole dollar.
Taxes and stamping fees are assessed against premium only. Do not include any broker fees, inspection fees or other items when calculating taxes and fees – just what is shown as “premium” on the policy or endorsement.
Twice per year, surplus line tax statements must be filed and any taxes due must be paid. Taxes are paid to the “Illinois Department of Insurance” and mailed to the address shown on the tax statement. The SLAI prepares the tax statements, based on the policies and endorsements reported, and mails them to licensees well ahead of the due date.
Taxes and fees are levied upon the surplus line producer who is permitted by law to pass them on to the insured. If the taxes and stamping fee are charged to the insured, they must each be shown as separate line items on the declarations page. Attaching the EFS filing confirmation page is an acceptable substitute for this requirement.
Click this button to try our tax calculator. But read the steps below so you know which date to use for extensions and multi-year policies.
1. Figure Out Which Date to Use
For | Use the |
Policies | Policy Inception Date |
Renewal Certificates | 1st Day of the Renewal Period |
Policy Extension Endorsements | 1st Day of the Extension Period |
Other Endorsements | Policy Inception Date |
Endorsements/Installments for Multi-Year Policies | Most Recent Policy Anniversary Date |
2. Look Up the Date in the Rate Chart Below
Date | Surplus Line Tax Rate* |
07/01/2003 & Thereafter | 3.5% or (.035) |
7/01/1985 – 06/30/200 | 3.0% or (.030) |
* Rounded to the nearest whole dollar
3. Complete the Calculation
Multiply the premium by the applicable Surplus Line Tax Rate and round to the nearest whole dollar.
Example: A policy is issued with an effective date of November 1, 2002, a term of 12 months, and a premium of $100,000. The surplus line tax for the policy is $3,000 (using the 3.0% rate in effect on November 1, 2002). An endorsement is issued adding a new location effective August 1, 2003 for an additional premium of of $1,000. The surplus line tax for the endorsement is $30 (still using the 3.0% rate — the rate in effect on the policy effective date). An endorsement is issued to extend the policy for an additional two months with a premium of $10,000. The surplus line tax for that endorsement is $350 (using the 3.5% rate — the rate in effect on the first day of the policy extension period which begins November 1, 2003).
When filing a renewal certificate, policy extension or annual installment of a multiyear policy on the EFS, select “Policy” in the “Filing Type” field and enter the information as if it were a brand new policy. This will ensure that the surplus line tax calculates properly.
The Surplus Line Producer Semi-Annual Tax Statement together with any associated tax payment is due twice per year: August 1st for all policies and endorsements filed with the SLAI from January to June; and February 1st for policies and endorsements filed from July to December (see tax statement due dates).
Submitting Statements is Required No Matter What
Just like with your personal IRS 1040 form, licensees must file their surplus line and fire marshal tax statements, on time, even if no money is owed and even if there was no activity. Although the SLAI prepares and mails tax forms to members, if for some reason you do not receive them, it is still your responsibility to hunt them down and get them filed on time. Statements can be download from the EFS, or you can contact us for copies.
Never Alter the Forms that the SLAI Prepares for You
By law, tax statement forms and payments are based on filings with the Association during the preceding six month period (for Surplus Line tax) or twelve month period (for Fire Marshal tax). If you feel something needs to be changed, it MUST be coordinated through the SLAI. Never manually alter these forms. Instead, contact the Association and we will figure it out.
Send them to the DOI
Do not send tax forms and tax payments to the SLAI. Tax forms and payments are sent to the Department of Insurance in Springfield. The address is on your tax forms. On the flipside, do not send your SLAI document filings or stamping fee payments to the Department of Insurance!
Have Proof of Mailing
By law the statements are deemed received by the DOI as of the date mailed, provided you have acceptable proof of mailing. Always use a service that provides proof of mailing and delivery. Since online proof of mailing and deliver is often removed after several months, you should download and save that proof from the service provider. Disputes about whether statements were sent and taxes were paid can often arise months or even years after the due date.