Not long ago, surplus lines brokers apportioned premium, calculated taxes at multiple tax rates and filed separate taxes and payments in every jurisdiction involved in a multi-state insurance risk. The Nonadmitted and Reinsurance Reform Act (NRRA) ushered in a national framework for uniformity and efficiency in the regulation and taxation of the surplus lines industry. 

Home state tax reform has dramatically improved the process and helped to reduce the cost of surplus lines tax compliance within the state-based regulatory system. Since the NRRA's enactment, NAPSLO has worked hard to advocate for the law's proper implementation and fully realize the goals of the federal law.

Forty-nine states have implemented NRRA, making tremendous strides toward home state taxation. Thirty-seven states, representing 75 percent of nationwide premium volume, are collecting and retaining 100 percent of the tax as the home state, with no current plans to participate in tax-sharing arrangements. Five states plus Puerto Rico have implemented the Nonadmitted Insurance Multi-State Agreement (NIMA), which became effective July 1,  representing approximately 17 percent of nationwide premium. In 2012, six states (Alaska, Connecticut, Hawaii, Mississippi, Nebraska and Nevada) withdrew from NIMA, leaving Florida, Louisiana, Puerto Rico, South Dakota, Utah and Wyoming as the only jurisdictions sharing surplus lines taxes. States that entered into the Surplus Lines Insurance Multistate Compliance Compact (SLIMPACT), which is not yet operational, collect 100 percent of the tax, increasing the home state approach to 46 states and more than 80 percent of nationwide premium