Premium Taxes

The insurance industry is subject to significant levels of taxation that are based on premiums, rather than income. These include state taxes imposed on various participants in the insurance industry, such as premium taxes, excess and surplus lines taxes, and self-placement taxes imposed on the purchasers of insurance from non-admitted insurers.

Those who insure United States risks with non-U.S. insurers may also become subject to the United States federal excise tax on insurance premiums. The federal excise tax on insurance premiums is in many cases eliminated through the application of a tax treaty.