Recently the New York legislature passed legislation with provisions for 100% of each surplus lines premium written in New York to be taxed. New York decided not to join the nationwide compact pertaining to sharing surplus lines taxes. California is likely to make the same decision. It is not yet clear what Florida and Texas will do.
Under the federal mandates of the Nonadmitted and Reinsurance Reform Act (NRRA), effective July 21, only the home state has authority over surplus lines transactions including taxes.
Many states were considering forming a nationwide compact for sharing the surplus lines premium taxes (SLIMPACT-Lite).
This raises the question, how effective will the compact be without the large states of New York and California and possibly Florida and Texas?
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