If you placed surplus lines coverage in Texas, your annual Texas surplus lines tax filing is due to the Comptroller of Public Accounts by March 1 of the following year, at a rate of 4.85% on gross premiums. Independent procurers who bought coverage directly from a non-admitted insurer file on a different track, with a May 15 deadline. Miss either and the penalty starts at 5% and climbs from there.
Who Files the Tax
Two different filers, two different returns.
Under Texas Insurance Code Chapter 225, the licensed surplus lines agent who placed the coverage is responsible for collecting the tax from the insured, reporting it, and remitting it to the Comptroller. Collection happens when the policy, cover note, or initial confirmation of insurance is delivered. If a managing underwriter handled the placement, the duty to collect and report shifts to the managing underwriter unless the parties agree in writing that the agent will handle it.1State of Texas. Texas Code Insurance Code 225.006 – Collection of Tax by Agent
A business or individual who bought insurance directly from a non-admitted insurer without going through a licensed Texas surplus lines agent has a separate obligation. Texas calls this “independent procurement,” and the entire filing burden sits with the purchaser. The rate is the same 4.85%, but the form and the deadline are different.2Texas Comptroller of Public Accounts. Insurance Premium Tax (Independently Procured)
The Rate and What’s Taxable
The tax is 4.85% of gross premiums charged by the non-admitted insurer.3Texas Comptroller of Public Accounts. Insurance Premium Tax (Surplus Lines/Purchasing Groups) Gross premiums here is broader than the word suggests. All policy fees are subject to the tax, so you can’t shrink the taxable base by labeling part of the charge as a fee instead of premium.
The Surplus Lines Stamping Office of Texas (SLTX) also collects a stamping fee, which funds its operations and is separate from the Comptroller’s tax. For policies with an inception date of January 1, 2024, or later, the stamping fee is 0.04% of premium.4Surplus Lines Stamping Office of Texas. Stamping Fees and Taxes It’s remitted through the SLTX filing process, not on your Comptroller return.
Filing Deadlines
The deadline depends on which filer you are, and getting this wrong is a common mistake.
- Surplus lines agents: the annual tax report and payment are due March 1 for the preceding calendar year. Premiums placed during 2025 are reported on a return due March 1, 2026.3Texas Comptroller of Public Accounts. Insurance Premium Tax (Surplus Lines/Purchasing Groups)
- Independent procurers: the annual tax report and payment are due May 15 for the preceding calendar year.2Texas Comptroller of Public Accounts. Insurance Premium Tax (Independently Procured)
If either date falls on a weekend or state holiday, the due date rolls to the next business day. Timeliness is set by the electronic timestamp or the mailed postmark. Last-day filing is a gamble because Webfile congestion and mail delays both exist.
Zero-Premium Reports
No activity still means a return. Every surplus lines licensee, individual or entity, must file a “zero premium” report with the Comptroller for each active license when no surplus lines business was written during the year.5Surplus Lines Stamping Office of Texas. Information Relating to Premium Tax – Licensing of Surplus Lines Agents Skipping it because there’s nothing to report can draw the same penalties as filing late.
Forms and How to File
Surplus lines agents file Form 25-104, the Annual Insurance Tax Report for Surplus Lines and Purchasing Groups, from the Comptroller’s insurance tax forms page.6Texas Comptroller of Public Accounts. Texas Insurance Tax Forms The form calls for line-item entries for every policy placed during the reporting year, with policy numbers, insurer names, and gross premium amounts. Independent procurers file a separate Comptroller return for their directly purchased coverage.
Most filers use Webfile, the Comptroller’s secure online portal, accessed through eSystems registration.7Texas Comptroller of Public Accounts. File and Pay It walks you through data entry, shows a summary of taxable premiums and total tax due, and takes an electronic signature. Save the confirmation number the portal generates after submission.
Payment options are electronic funds transfer, credit card, or a mailed check. If you mail a check, include the payment voucher Webfile generates so the Comptroller can match the payment to your return. Electronic payments clear faster and give you immediate confirmation that the funds landed, which is worth something when a missed deadline carries a percentage-based penalty.
Credits for Cancelled or Rewritten Policies
Tax isn’t paid twice on the same premium. Under Texas Insurance Code Section 225.011, when a surplus lines policy is cancelled and rewritten, the taxable premium on the replacement policy is only the amount that exceeds the unearned premium returned from the cancelled contract. Subtract the returned unearned premium from the new policy’s premium before applying 4.85%. Track these adjustments as they happen so the annual return reflects the correct net taxable premium.
Penalties and Interest
The Comptroller’s penalty structure applies to both surplus lines agent returns and independent procurement returns:
- 1 to 30 days late: a 5% penalty on the unpaid tax.
- More than 30 days late: a 10% penalty on the unpaid tax.
- Interest begins accruing 61 days after the due date on any unpaid balance.3Texas Comptroller of Public Accounts. Insurance Premium Tax (Surplus Lines/Purchasing Groups)
These are the tax penalties assessed by the Comptroller. Separate consequences flow through the Surplus Lines Stamping Office for late policy filings, on a different schedule.
SLTX Late Policy Filing Fees Are Separate
The Comptroller handles the tax. SLTX handles the policy filings themselves, and it assesses its own per-policy fees when a broker files a policy late with the stamping office. The amount depends on how late the policy is and on the broker’s track record in the prior year:
- 61 to 180 days late, 5% or fewer policies late in the prior year: $50 per policy.
- 61 to 180 days late, more than 5% of policies late in the prior year: $100 per policy.
- 181 to 364 days late, fewer than 2% of policies late in the prior year: $200 per policy.8Surplus Lines Stamping Office of Texas. Compliance Guidelines
A policy filed 365 or more days late, or an unpaid assessed fee more than 30 days after notice, exposes the broker to enforcement action by the Texas Department of Insurance. TDI notifies brokers of assessed fees by June 15 each year, and payment is due within 30 days of that notice.8Surplus Lines Stamping Office of Texas. Compliance Guidelines Repeat noncompliance can put the license at risk.
Multi-State Placements and the Home State Rule
If a surplus lines policy covers risks in more than one state, the Nonadmitted and Reinsurance Reform Act (NRRA) controls who collects the tax. Under 15 U.S.C. § 8201, only the insured’s home state may require premium tax payment on non-admitted insurance. No other state can impose its own surplus lines tax on the same policy.9Office of the Law Revision Counsel. 15 USC 8201 – Reporting, Payment, and Allocation of Premium Charges
Home state is set this way:
- Individual: the state of principal residence.
- Business entity: the state of the principal place of business.
- Group of affiliated entities: the home state of whichever entity accounts for the largest share of premium.
- No insured risk in the home state: the state where the greatest percentage of taxable premium is allocated.
For a Texas-based insured, the full surplus lines premium is taxed in Texas at 4.85%, even if some of the risk sits in other states.2Texas Comptroller of Public Accounts. Insurance Premium Tax (Independently Procured) Texas may require brokers and independent procurers to file allocation reports showing what portion of premium is attributable to risks in each state, but the tax itself stays with Texas as the home state.
Records to Keep
The filing goes smoothly when the records are already in order. You need the declarations page for every surplus lines policy placed during the year, with the full legal name of each non-admitted insurer, policy numbers, effective dates, and gross premium amounts. Check each declarations page against the Comptroller’s form instructions so no field is missed.
Keep a running spreadsheet through the year that tracks premiums written, endorsement adjustments that raise or lower premium, and returned premiums from cancellations. Reconstructing this in late February is where errors creep in. Confirm whether any premiums involve tax-exempt entities such as federal agencies, which can reduce the taxable base.
Hold onto all records, including policies, invoices, and insurer correspondence, for at least four years in case the Comptroller requests them for audit. Documentation at hand keeps a routine audit from turning into a disputed assessment.