Missouri’s surplus lines tax is a 5% premium tax on insurance placed with non-admitted insurers when Missouri is the insured’s home state. A licensed surplus lines broker calculates, collects, and remits the tax when a broker handles the placement; the insured pays it directly when the coverage is self-procured. The rate applies to the net premium, and payment is due before April 16 of the year following the coverage period.
How the 5% Is Calculated
The tax applies to net premium, meaning the gross amount charged minus any premium returned from cancellations or mid-term changes. Policy fees, inspection fees, and other charges that the surplus lines insurer retains count as premium for tax purposes.1Missouri Secretary of State. 20 CSR 200-6 – Surplus Lines Fees a broker charges and keeps under a separate broker service agreement do not.
When Missouri is the insured’s home state, the 5% covers the entire gross premium on the policy even if the insured risk sits in several states.2Missouri Revisor of Statutes. Missouri Code 384.061 – Premium Tax to Be Levied Only on Entire Gross Premium for Nonadmitted or Surplus Lines Insurance Policies No other state can tax that same premium. The single-state rule comes from the federal Nonadmitted and Reinsurance Reform Act, which gives exclusive taxing authority to the home state.3Office of the Law Revision Counsel. 15 USC Chapter 108 – State-Based Insurance Reform
Who Pays
Broker-Placed Policies
When a licensed surplus lines broker places the coverage, the broker calculates, collects, and remits the 5%. The statute treats this as a privilege tax on the broker for doing surplus lines business in Missouri, and the broker may pass the full amount to the insured.4Missouri Revisor of Statutes. Missouri Code 384.059 – Premium Tax Applicable to Surplus Lines, Rate, Payment – Broker May Charge Tax to Insured In practice they do.
Self-Procured Policies
If a Missouri insured obtains non-admitted coverage without going through a surplus lines broker, the insured owes the 5% directly on the gross premium.5Missouri Revisor of Statutes. Missouri Code 384.051 – Insured to File Report on Surplus Lines Insurance Not Obtained Through a Broker This comes up most often with larger commercial risks and specialty coverages where the insured deals directly with a non-admitted carrier.
Broker Filing Requirements
Licensed surplus lines brokers file two separate reports with the Missouri Department of Commerce and Insurance.
The quarterly report uses Appendix 1 and captures policy-level data for each placement in the quarter. It is filed electronically within 45 days after the quarter ends and must include the producer’s name and address, the insured’s name and address, the policy number, the effective date, and the premium.6Legal Information Institute. 20 CSR 200-6.100 – Surplus Lines Insurance Forms7Missouri Department of Insurance. Surplus Lines Appendix 1 Filing Instructions
The annual tax report uses Appendix 3, which totals the year’s premium and the 5% tax owed. It is also filed electronically through the department’s prescribed system, with instructions and access on insurance.mo.gov.6Legal Information Institute. 20 CSR 200-6.100 – Surplus Lines Insurance Forms
Self-Procured Filing Requirements
If you placed the coverage yourself, you must file a written report with the director of the Department of Commerce and Insurance before March 2 of the year following the placement or renewal. The report lists the insured’s name and address, the insurer’s name and address, the subject and general description of the coverage, and the premium charged; the department may request additional information.5Missouri Revisor of Statutes. Missouri Code 384.051 – Insured to File Report on Surplus Lines Insurance Not Obtained Through a Broker Missouri provides Appendix 4, the Self-Procured Insurance Tax Report, for this purpose. Use it instead of the broker forms.
When the Tax Is Due and Where It Goes
Payment is due before April 16 of the year following the coverage period, whether a broker remits for a placed policy or an insured pays on self-procured coverage.4Missouri Revisor of Statutes. Missouri Code 384.059 – Premium Tax Applicable to Surplus Lines, Rate, Payment – Broker May Charge Tax to Insured5Missouri Revisor of Statutes. Missouri Code 384.051 – Insured to File Report on Surplus Lines Insurance Not Obtained Through a Broker
One detail trips people up. The payment goes to the Missouri Department of Revenue, not the Department of Commerce and Insurance, and checks or drafts should be made payable to the director of revenue. Revenue then notifies the director of insurance of amounts collected from each licensee or insured.8Missouri Revisor of Statutes. Missouri Code 384.062 – Recovery of Unpaid Tax, Penalty, or Interest
Cancellations and Returned Premium
When a policy is cancelled mid-term and the insurer returns part of the premium, the taxable amount drops. The 5% applies only to net premium after returns.4Missouri Revisor of Statutes. Missouri Code 384.059 – Premium Tax Applicable to Surplus Lines, Rate, Payment – Broker May Charge Tax to Insured If tax was already paid on the full original premium, the overpayment can be credited against future filings. Document returns in the quarterly and annual reports so the calculation matches what the insurer actually retained.
Exempt Commercial Purchasers
Missouri lets qualifying “exempt commercial purchasers” skip the diligent search of the admitted market that normally precedes a surplus lines placement. The broker must still disclose that admitted coverage might be available with greater regulatory protection, and the buyer must request the surplus lines placement in writing.9Missouri Revisor of Statutes. Missouri Code 384.021 – Surplus Lines Insurance, Placement The exemption does not change the tax: ECPs still owe the full 5%.
To qualify, the buyer must employ a qualified risk manager and have paid more than $100,000 in aggregate commercial property and casualty premiums nationwide in the prior twelve months. The buyer must also meet at least one of these thresholds:10Missouri Revisor of Statutes. Missouri Code 384.015 – Definitions
- Net worth over $20 million
- Annual revenue over $50 million
- More than 500 full-time employees individually, or more than 1,000 in an affiliated group
- Nonprofit or public entity with annual expenditures of at least $30 million
- Municipality with population over 50,000
Penalties for Late or Unpaid Tax
If a surplus lines broker fails to pay any tax, penalty, or interest on time, the director of insurance can sue to recover the amount, and all delinquent amounts are paid through the Department of Revenue.8Missouri Revisor of Statutes. Missouri Code 384.062 – Recovery of Unpaid Tax, Penalty, or Interest A pattern of late filings or missed payments also puts the broker’s surplus lines license at risk, which ends the ability to place non-admitted coverage in Missouri.