Multi-line FM Tax
Calculation Examples
Method #1
If the premium charged for each peril is shown separately on the declarations page or
elsewhere in the policy, compute the fire marshal tax on the premium for each peril separately. Look up
the applicable portion of the premium using the fire marshal tax chart in the Procedures Manual. Then
apply the 1% fire marshal tax to the Applicable Portion of the premium.
| Peril |
Premium |
Applicable
% Portion |
Premium
Subject to
FM Tax |
FM Tax
Rate |
FM Tax |
| Liability portion |
$ |
15,000 |
0% |
$ |
0 |
x 1% = |
$ |
0 |
| Property portion |
|
5,000 |
100% |
|
5,000 |
x 1% = |
|
50 |
| Inland Marine portion |
|
3,000 |
15% |
|
450 |
x 1% = |
|
5 |
| Total |
$ |
23,000 |
|
|
|
$ |
55 |
Note that the calculation for each peril is made separately and that
each calculation is rounded to the nearest whole dollar before summing.
Method #2
If the breakout of premium by peril is not shown on the
declarations page or elsewhere in the policy, charge the 1% tax rate against 40% of
the entire policy premium.
| |
Premium |
Applicable
% Portion |
Premium
Subject to
FM Tax |
FM Tax
Rate |
FM Tax |
| Combined Premium |
$ |
23,000 |
40% |
$ |
9,200 |
x 1% = |
$ |
92 |
|
|
|
