297I.20 OFFSETS AGAINST PREMIUM TAXES.
Subdivision 1. Guaranty association assessment offsets.
(a) An insurance company may
offset against its premium tax liability to this state any amount paid for assessments made for
insolvencies which occur after July 31, 1994, under sections
; and any amount
paid for assessments made after July 31, 1994, under Minnesota Statutes 1992, sections
, or under sections
(1) Each such assessment shall give rise to an amount of offset equal to 20 percent of the
amount of the assessment for each of the five calendar years following the year in which the
assessment was paid.
(2) The amount of offset initially determined for each taxable year is the sum of the amounts
determined under clause (1) for that taxable year.
(b)(1) Each year the commissioner shall compare total guaranty association assessments
levied over the preceding five calendar years to the sum of all premium tax and corporate
franchise tax revenues collected from insurance companies, without reduction for any guaranty
association assessment offset in the preceding calendar year, referred to in this subdivision as
"preceding year insurance tax revenues."
(2) If total guaranty association assessments levied over the preceding five years exceed the
preceding year insurance tax revenues, insurance companies must be allowed only a proportionate
part of the premium tax offset calculated under paragraph (a) for the current calendar year.
(3) The proportionate part of the premium tax offset allowed in the current calendar year
is determined by multiplying the amount calculated under paragraph (a) by a fraction. The
numerator of the fraction equals the preceding year insurance tax revenues, and its denominator
equals total guaranty association assessments levied over the preceding five-year period.
(4) The proportionate part of the premium tax offset that is not allowed must be carried
forward to subsequent tax years and added to the amount of premium tax offset calculated under
paragraph (a) prior to application of the limitation imposed by this paragraph.
(5) Any amount carried forward from prior years must be allowed before allowance of the
offset for the current year calculated under paragraph (a).
(6) The premium tax offset limitation must be calculated separately for (i) insurance
companies subject to assessment under sections
, and (ii) insurance companies
subject to assessment under Minnesota Statutes 1992, sections
(7) When the premium tax offset is limited by this provision, the commissioner shall
notify affected insurance companies on a timely basis for purposes of completing premium
and corporate franchise tax returns.
(8) The guaranty associations created under sections
, Minnesota Statutes
, shall provide the commissioner with
the necessary information on guaranty association assessments.
(c)(1) If the offset determined by the application of paragraphs (a) and (b) exceeds the
insurance company's premium tax liability under this section prior to allowance of the credit for
premium taxes, then the insurance company may carry forward the excess, referred to in this
subdivision as the "carryforward credit" to subsequent taxable years.
(2) The carryforward credit is allowed as an offset against premium tax liability for the first
succeeding year to the extent that the premium tax liability for that year exceeds the amount of the
allowable offset for the year determined under paragraphs (a) and (b).
(3) The carryforward credit must be reduced, but not below zero, by the amount of the
carryforward credit allowed as an offset against the premium tax under this paragraph. The
remainder, if any, of the carryforward credit must be carried forward to succeeding taxable years
until the entire carryforward credit has been credited against the insurance company's liability for
premium tax under this chapter if applicable for that taxable year.
(d) When an insurer has offset against taxes its payment of an assessment of the Minnesota
Life and Health Guaranty Association, and the association pays the insurer a refund with respect
to the assessment under Minnesota Statutes 1992, section
61B.07, subdivision 6
, then the refund reduces the insurer's carryforward credit under paragraph (c). If the
refund exceeds the amount of the carryforward credit, the excess amount must be repaid to the
state by the insurers to the extent of the offset in the manner the commissioner requires.
Subd. 2. Joint Underwriting Association offset.
An assessment made pursuant to section
62I.06, subdivision 6
, shall be deductible by the member from past or future premium taxes due
History: 2000 c 394 art 1 s 5; 1Sp2001 c 5 art 9 s 25; 2003 c 127 art 7 s 13