Bruce Wright of Eversheds Sutherland explains the Dodd-Frank legislation and direct placement taxes. Direct placement taxes (direct procurement taxes) apply to surplus lines placements as well as placements with any nonadmitted company, such as a captive insurer. The "home state" is what controls where the payment of this tax is concerned and is generally the principal place of business of the corporation that is paying the insurance premium. The tax analysis is done on a policy by policy basis based on where the largest amount of premium is located. This becomes an important factor in context of a captive insurer's feasibility study and may ultimately influence how captive insurers do business and issue insurance policies.