Who is responsible for paying surplus lines taxes?

The responsibility for paying surplus lines taxes typically falls on the surplus lines producer or broker. This is because the producer is the one who facilitates the placement of surplus lines insurance, which is coverage obtained from non-admitted insurers when coverage is not available through standard licensed insurance carriers.

Surplus lines producers or brokers are required to collect and remit the necessary taxes to the state as part of their duty to comply with regulations governing surplus lines transactions. This process ensures that states receive the appropriate revenue from insurance transactions involving non-admitted carriers.

Although insurers may have obligations in other aspects of insurance transactions, they do not directly handle surplus lines tax payments. Similarly, policyholders are not responsible for this tax; their obligation is typically limited to paying premiums and fees associated with their insurance policies. The role of the state government is to establish and enforce the regulations for tax payments and monitor compliance, rather than being responsible for payment itself.