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2. When are Insurance Premiums, Surplus Lines Premiums and Fire Investigation and Premium tax payments and returns due?

Generally, Insurance Premium and Surplus Lines Premium taxes must be paid quarterly, on a calendar year basis, along with a quarterly return and an annual reconciliation return required March 15 of the following year. The amount of the quarterly payments must be, at the election of the insurance company, based on either the prior year or current year annual tax liability. The election is made on Form INS-4 (Insurance Premiums tax return) or Form INS-7 (Surplus Lines Premiums tax return). The election is irrevocable for that calendar year. Please see Form INS-4 for more specific filing and payment instructions.

Those who elect to make estimated payments based on their current year tax liability should be certain they are able to accurately forecast the annual tax they will be obligated to pay for the year. The required payment for each estimated return will be calculated based on the tax imposed on the premiums written for the entire year. Failure to accurately forecast the tax (thus resulting in an underpayment on the estimated returns) may trigger assessment of penalty and interest for each quarter. Those electing to make estimated payments based on prior year tax liability will use the total tax paid for the prior year as the basis for calculating the amount to report and pay on the quarterly estimated returns. Regardless of which method is used, any shortfall or overpayment will be reported on the annual/reconciliation return on March 15.

An insurance company may elect an annual filing and payment of the premiums tax if: (1) a request is made to Maine Revenue Services in writing before the calendar year begins, AND (2) the insurer or producer will have a total annual premiums tax of $500 or less for the calendar year. (a change in filing status form is available on the Maine Revenue Services web site.) Insurers and producers electing to file and pay annually must file the annual/reconciliation Return no later than March 15. Companies electing to file and pay annually will be subject to penalties and interest if the annual tax exceeds $500.

Premiums for fire insurance coverage are subject to an additional tax. The fire premiums tax estimated payments are due monthly, using Form INS-2 (see 25 M.R.S.A. § 2399) in an amount equal to one-twelfth of the estimated tax obligation for the current calendar year. The Annual/Reconciliation return (Form INS-5) is due March 15 following the end of the calendar year, which may result in either a tax balance due or a refund. Because overpayments cannot be carried to the next year, all overpayments are refunded. Companies may elect to pay the entire calendar year liability in advance by sending one check with all twelve returns (Form INS-2) by January 31st of the calendar year.

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