Florida’s Insurance Premium Taxes and Fees

The Florida Department of Revenue has recently issued Tax Information Publication (TIP) No. 25B8-01, providing updated guidance on insurance premium taxes and regulatory assessments. This newly released TIP clarifies the classification of inland marine insurance, separates pet insurance from previous inland marine categorizations, and reinforces the reporting requirements for insurers. Insurers must carefully review these updates to ensure compliance and avoid potential penalties. This publication serves as a critical resource for property and casualty insurers writing inland marine insurance policies in Florida.

Florida Insurance Premium Taxes and State Fire Marshal Regulatory Assessment

Property and casualty insurers that underwrite inland marine insurance in Florida must accurately report and pay the State Fire Marshal Regulatory Assessment. This assessment is imposed on premiums collected for inland marine insurance policies as specified in the Florida Insurance Premium Taxes and Fees Return (Form DR-908). It is important to note that beginning in 2024, pet insurance has been separated from inland marine insurance in Annual Statements, with inland marine insurance classified under Line 9.1 and pet insurance under Line 9.2 on the Florida State Page. Only inland marine insurance premiums from Line 9.1 should be included on Schedule X of Form DR-908.

State Fire Marshal Regulatory Assessment Rates

The regulatory assessment rate for insurers issuing fire insurance policies in Florida is set at 1% (0.01). Additionally, any insurer authorized to conduct insurance business in Florida must remit a 0.1% (0.001) surcharge on all gross direct fire, allied lines, and multiple peril insurance premiums written for commercial properties located within the state. These amounts must be accurately reported on Schedule X of Form DR-908.

Breakdown of Tax Calculations

• Fire insurance premiums: Subject to the 1% regulatory assessment.

• Allied lines and multiple peril commercial property insurance premiums: Subject to a 0.1% surcharge.

• Inland marine insurance: Only premiums listed under Line 9.1 should be reported.

• Pet insurance: Now classified separately under Line 9.2 and does not contribute to inland marine assessments.

Compliance and Reporting Requirements

Who Must Comply?

• Domestic, foreign, and alien insurers issuing fire insurance policies in Florida.

• Insurers that underwrite inland marine insurance and are subject to the State Fire Marshal Regulatory Assessment.

• Companies that issue allied lines and multiple peril insurance policies covering commercial properties in Florida.

Proper Filing of Form DR-908

All applicable insurers must ensure that:

• Only inland marine insurance premiums from Line 9.1 are included in Schedule X of Form DR-908.

• The correct assessment rates are applied when calculating tax liabilities.

• The appropriate surcharges on commercial property policies are accounted for in tax filings.

• Pet insurance premiums (Line 9.2) are not included in the inland marine insurance line.

Failure to adhere to these reporting standards could result in audits, penalties, and additional liabilities for the insurer.

References and Additional Information

Florida’s insurance premium tax laws are governed under Section 624.515, Florida Statutes. Insurers must regularly check for updates to ensure compliance with regulatory requirements.

For more details, insurers can:

• Visit the Florida Department of Revenue website at floridarevenue.com.

• Call Taxpayer Services at (850) 488-6800, Monday through Friday (excluding holidays).

• Request a written response by mailing inquiries to:
  Florida Department of Revenue, Taxpayer Services
  MS 3-2000, 5050 West Tennessee Street, Tallahassee, FL 32399-0112

Penalties for Non-Compliance

Insurers that fail to report inland marine insurance premiums properly or misclassify pet insurance under the inland marine category may face:

• Financial penalties for underpayment of the required taxes.

• Possible audits and additional scrutiny from the Florida Department of Revenue.

• Delays in processing tax filings, potentially affecting compliance status.