Official Site of The State of New Jersey

Insurance Premiums Tax

The Insurance Premiums Tax applies to premiums collected on insurance risks by every insurance company transacting business in New Jersey. The tax base is gross contract premiums less specified deductions. Annuity considerations and reinsurance premiums are not taxed.

With a few exceptions, the tax rate is 2% of the premiums collected on insurance risks in this State. The tax is prepaid based on the previous year’s premiums, with payments due March 1 and June 1.

Exceptions:

• Group accident and health insurance premiums (1%);
• Ocean marine risks (5% of three-year average of underwriting profits);
• Workers’ compensation premiums (2.25%).

If, for any insurance company, the ratio of New Jersey business to total business is greater than 12.5%, the tax is imposed on only 12.5% of that company’s total premiums. Another .05% is imposed on group accident and health premiums, and another .1% on all other insurance premiums.

Applicable Laws and Rules

N.J.A.C. 11:2, N.J.S.A. 54:18A-1(b), (c), N.J.S.A. 54:18A-1, N.J.S.A. 54:18A-6, N.J.S.A. 54:18A-2, N.J.S.A. 54:18A-2(c), 54:18A-3(c), P.L. 2009, c 75, N.J.S.A. 54:18A-1(a)