The Louisiana surplus lines tax is 4.85% of the gross premium on any surplus lines policy where Louisiana is the policyholder’s home state. The surplus lines broker who placed the policy owes the tax and files quarterly with the Louisiana Department of Insurance. When a policyholder places coverage directly with a non-admitted insurer without going through a broker, the policyholder owes the same 4.85% and must report and pay within 30 days of the transaction.1Justia Law. Louisiana Code RS 22-439 – Tax on Surplus Lines and Unauthorized Insurance
What the 4.85% Applies To
The rate is set by La. R.S. 22:439 and attaches to gross premium, meaning the full amount the insurer charges for coverage. The statute does not carve out inspection fees, policy fees, or other itemized charges, so unless the Department of Insurance has said otherwise, treat the entire premium as taxable.
A $100,000 surplus lines premium generates $4,850 in state tax. If the policy also insures against fire loss, a separate 1.25% fire marshal assessment applies under La. R.S. 22:835, adding $1,250 on that same policy for a combined $6,100 in state-level charges. Most commercial property policies include fire coverage, so the fire marshal piece is not unusual.2Justia Law. Louisiana Code RS 22-835 – Fire Marshal Tax; Louisiana Fire Marshal Fund
When Louisiana Is the Taxing State
The tax follows the policyholder’s home state, not the location of the insured property or risk. A Louisiana company insuring a warehouse in Texas still owes Louisiana 4.85% on the full premium. This is the point that catches brokers off guard.
The federal Nonadmitted and Reinsurance Reform Act made home state the only test: only the insured’s home state may collect premium tax on non-admitted insurance, and no other state gets a share.3Office of the Law Revision Counsel. 15 USC 8201 – Reporting, Payment, and Allocation of Premium Taxes
Louisiana’s definition of home state, under La. R.S. 22:46, works in tiers:
- For an individual, the state of principal residence.
- For a business, the state of its principal place of business.
- For affiliated groups covered on a single policy, the home state of the group member that carries the largest percentage of the premium.
- If 100% of the insured risk sits outside the states identified above, the home state is whichever state receives the greatest share of the taxable premium.4FindLaw. Louisiana Code RS 22-46 – Definitions
The upside for multi-state risks is that the full tax goes to one state. The downside is that a Louisiana-domiciled buyer with exposure spread across the country pays Louisiana on all of it.
Filing Deadlines
Surplus lines brokers file quarterly using Form 1265, the Quarterly Surplus Lines Producer Tax Statement, through the Louisiana Department of Insurance Industry Access portal. Each quarter’s deadline falls roughly two months after the quarter closes:
- First quarter (January through March): due June 1
- Second quarter (April through June): due September 1
- Third quarter (July through September): due December 1
- Fourth quarter (October through December): due March 11Justia Law. Louisiana Code RS 22-439 – Tax on Surplus Lines and Unauthorized Insurance
A quarterly report covers new and renewal policies with effective dates in that quarter, plus any other premium transactions invoiced during the period. A broker with no surplus lines business in a given quarter may skip that quarter’s Form 1265.5Louisiana Department of Insurance. Surplus Lines Premium Tax
The annual Form 1265A is different. Every licensed surplus lines broker must file it by March 1, whether or not they wrote any business during the year. The form either certifies the year’s activity or confirms that none took place.5Louisiana Department of Insurance. Surplus Lines Premium Tax
Direct placements by a policyholder follow a separate track: a direct placement tax report with payment is due within 30 days of the transaction rather than on the quarterly schedule.1Justia Law. Louisiana Code RS 22-439 – Tax on Surplus Lines and Unauthorized Insurance
Penalties for Filing or Paying Late
Under La. R.S. 22:440, missing a deadline adds a 10% penalty on the tax due. The commissioner can waive that penalty only when the delay resulted from an unavoidable cause beyond mere neglect and the filing was no more than 30 days late. Both conditions must be met.6Louisiana State Legislature. Louisiana Code RS 22-440 – Penalty for Failure to File Report or Remit Tax
After 30 days, the commissioner can suspend or revoke the broker’s surplus lines license until the delinquent report is filed and the tax is paid in full. A separate general statute, La. R.S. 22:846, applies a graduated scale to delinquent insurance taxes running from 5% at one to 30 days late up to 25% beyond 120 days, with a $25 minimum and a 25% cap, and requires revocation of authority to do business after 30 days of delinquency.7Justia Law. Louisiana Code RS 22-846 – Penalty on Delinquent Tax; Revocation of Authority to Do Business After Thirty Days Delinquency
Local Parish and Municipal Taxes
Parishes and municipalities have their own authority under La. R.S. 22:833 to impose premium taxes on insurers, using a graduated schedule based on gross receipts in the jurisdiction with a $9,000 cap per insurer per jurisdiction on property and casualty lines. Local taxes apply to premiums written on risks located within the taxing jurisdiction, and a single risk cannot be taxed by both a parish and a municipality.8Justia Law. Louisiana Code RS 22-833 – Authorization of Local Taxes; Penalties for Nonpayment
La. R.S. 22:833 does not specifically address surplus lines policies, and local practice varies. If a policy covers Louisiana risks in multiple parishes or municipalities, confirm the local obligation with each jurisdiction directly rather than assuming the state-level filing is the end of it.