Surplus Lines Taxes & Fees
All surplus lines insurance policies in which North Carolina is the home state, are subject to a premium tax. The only exception are policies that have qualified for an NCDOI approved tax exemption or a statutory line coverage exemption. The NCSLA by statute, will process all surplus lines insurance filings and charge a stamping fee.
North Carolina Surplus Lines Tax
The North Carolina surplus lines tax is five percent (5%) on all taxable transactions.
This tax will apply to all premiums, company (insurer) imposed fees, and all endorsements entered in SLIP.
North Carolina Surplus Lines Stamping Fee
New & Renewal Policies:
The North Carolina surplus lines stamping fee percentage charged on the premium is based on the effective date of the policy. The stamping fee will apply to all premiums, company (insurer) imposed fees, and all endorsements entered in SLIP.
- Three-tenths of one percent (0.3%) on all new and renewal policies with an effective date on or after January 1, 2023
- Four-tenths of one percent (0.4%) on all new and renewal policies with an effective date from Jan 1, 2017 – Dec 31, 2022.
Endorsements:
The stamping fee for all endorsements, audits, installments, cancellations or return premium
transactions will be the same percentage as the inception date of the policy being endorsed.
- Example One: The stamping fee for a policy with an effective date of 10/01/2022 is 0.4% of the
total gross premium. An additional premium endorsement to this policy with an endorsement
effective date of 06/01/2023 is 0.4%. If a cancellation takes place with an effective date of
08/01/2023, the stamping fee credit is 0.4% of the returned premium. - Example Two: The stamping fee for a policy with an effective date of 01/01/2023 is 0.3% of the
total gross premium. An additional premium endorsement to the policy with an endorsement
effective date of 06/01/2023 is 0.3%. If a cancellation takes place with an effective date of
08/01/2023, the stamping fee credit is 0.3%.
Surplus Lines Tax & Fee Examples
Example 1:
| Premium: | $1000.00 |
| NC surplus lines tax (1000 x 0.05): | $50.00 |
| NC stamping fee (1000 x .003): | $3.00 |
Example 2:
|
$1000.00 |
|
$200.00 |
|
$60.00 |
|
$3.60 |
Taxable Fees
Company fees are taxable.
Company fees are those charged by the insurance company (insurer). The NCDOI considers all fees charged by the insurer part of the premium and subject to surplus lines tax and stamping fee.
Non-Taxable Fees
Any fees charged and retained by the broker are not considered company fees and are not subject to surplus lines tax or the stamping fee.
Foreign Premium Taxes
If North Carolina is the home state, then all premium (including foreign premium) must be declared in the tax filing. However, if the premiums can be separated (domestic vs foreign) and proof can be provided that foreign taxes were paid, then we can ask the NCDOI to make an exception.
For approval of this exception, please submit to the NCSLA a copy of the policy (declarations page), any policy forms that indicate the premium breakout, and proof of the foreign tax payments.
Note: Do not file the policy transaction in SLIP until we have the NCDOI approval for this exception.