US Direct / Self Procurement Insurance Tax

US self or direct procurement insurance is risk cover purchased in the US directly from a non-admitted insurer.  In many US States, direct procurement tax is levied through a separate regime on a number of classes of insurance.

It is arranged by the insured either directly with a non-admitted insurer in the State, or through a non-admitted broker in the territory where the cover extends to.

The alternative route for obtaining non-admitted insurance in the US is through Surplus Lines insurance.

Premium Taxes on Self / Direct Procured Insurance

39 US States charge special tax rates on self procured insurance, based on the gross premium.  These range from 2% to 6%, depending on the State and class of risk.  In the remaining states, there is no tax regime – although it is not clear if this means Self Procured Insurance is permitted or regulated.

Click here if you would like an up-to-date list of Direct Procurement Taxes by State.

Payment of Self / direct Procurement taxes

The insured party is generally responsible for the settlement of direct procurement taxes.  Companies should be careful to pay taxes within one to three months (depending on the State) of the inception of the policy as penalties can be punitive.

Click here if you would like free guidance on the settlement procedures by State

TMF can provide assistance with direct procurement tax settlement through its US offices (New York, Miami, Los Angeles and Atlanta).  Contact us to learn more:

enquiries@tmf-group.com

+44 (0)870 067 8881