2006 Minnesota Statutes

CHAPTER 297I. INSURANCE TAXES

297I.01 DEFINITIONS.
    Subdivision 1. Terms. Unless the language or context clearly indicates that a different
meaning is intended, for the purposes of this chapter, the following terms have the meanings
given them.
    Subd. 2. Association or associations. "Association" or "associations" has the meaning given
in section 60A.02, subdivision 1a.
    Subd. 3. Commissioner. "Commissioner" means the commissioner of revenue of the
state of Minnesota.
    Subd. 4. Community integrated service network. "Community integrated service network"
has the meaning given in section 62N.02, subdivision 4a.
    Subd. 5. Company or insurance company. "Company" or "insurance company" has the
meaning given in section 60A.02, subdivision 4.
    Subd. 6. Department of Revenue. "Department of Revenue" means the Minnesota
Department of Revenue or commissioner of revenue.
    Subd. 6a. Direct business. (a) "Direct business" means all insurance provided by an
insurance company or its agents, and specifically includes stop-loss insurance purchased in
connection with a self-insurance plan for employee health benefits or for other purposes, but
excludes:
(1) reinsurance in which an insurance company assumes the liability of another insurance
company; and
(2) self-insurance.
(b) For purposes of this subdivision, an insurance company includes a nonprofit health
service corporation, health maintenance organization, and community integrated service network.
    Subd. 7. Domestic. "Domestic" has the meaning given in section 60A.02, subdivision 5.
    Subd. 8. Foreign. "Foreign" has the meaning given in section 60A.02, subdivision 6.
    Subd. 9. Gross premiums. "Gross premiums" means total premiums paid by policyholders
and applicants of policies, whether received in the form of money or other valuable consideration,
on property, persons, lives, interests and other risks located, resident, or to be performed in this
state, but excluding consideration and premiums for reinsurance assumed from other insurance
companies. The term "gross premiums" includes the total consideration paid to bail bond agents
for bail bonds. For title insurance companies, "gross premiums" means the charge for title
insurance made by a title insurance company or its agents according to the company's rate filing
approved by the commissioner of commerce without a deduction for commissions paid to or
retained by the agent. Gross premiums of a title insurance company does not include any other
charge or fee for abstracting, searching, or examining the title, or escrow, closing, or other related
services. The term "gross premiums" includes any workers' compensation special compensation
fund premium surcharge pursuant to section 176.129.
    Subd. 10. Health maintenance organization. "Health maintenance organization" has the
meaning given in section 62D.02, subdivision 4.
    Subd. 11. Nonprofit health service plan corporation. "Nonprofit health service plan
corporation" has the meaning given in section 62C.02, subdivision 6.
    Subd. 12. Insurance. "Insurance" means the same as that term is defined in section 60A.02,
subdivision 3 .
    Subd. 13. Insurance agent or insurance agency. "Insurance agent" or "insurance agency"
has the meaning given in section 60A.02, subdivision 7.
    Subd. 13a. Reinsurance. "Reinsurance" is insurance whereby an insurance company, for a
consideration, agrees to indemnify another insurance company as defined under section 297I.01,
subdivisions 5 and 6a , paragraph (b), to the extent taxable under section 297I.05, against all or
part of the loss which the latter may sustain under the policy or policies which it has issued.
    Subd. 14. Return premiums. "Return premiums" means any dividend or any unused or
unabsorbed portion of premium deposit or assessment that is applied toward the payment of
any premium, premium deposit, or assessment due from the policyholder or member upon a
continuance or renewal of the insurance on account of which the dividend was earned or premium
deposit or assessment paid. Return premiums also includes any portion of premium returned by
the company upon cancellation or termination of a policy or membership, except surrender values
paid upon the cancellation and surrender of policies or certificates of life insurance.
    Subd. 15. State. "State" has the meaning given in section 60A.02, subdivision 18.
    Subd. 16. Taxpayer. "Taxpayer" means any insurance company, association, surplus lines
licensee, automobile risk self-insurer, or insured or any other person or entity required to pay
any amount due under this chapter.
History: 2000 c 394 art 1 s 1; 2003 c 127 art 7 s 12; 2005 c 151 art 8 s 16; 1Sp2005 c
3 art 6 s 16,17

297I.05 TAX IMPOSED.
    Subdivision 1. Domestic and foreign companies. Except as otherwise provided in this
section, a tax is imposed on every domestic and foreign insurance company. The rate of tax is
equal to two percent of all gross premiums less return premiums on all direct business received by
the insurer or agents of the insurer in Minnesota, in cash or otherwise, during the year.
    Subd. 2. Town and farmers' mutual insurance. A tax is imposed on town and farmers'
mutual insurance companies. The rate of tax is equal to one percent of gross premiums less return
premiums on all direct business received by the insurer or agents of the insurer in Minnesota, in
cash or otherwise, during the year.
    Subd. 3. Mutual property and casualty companies with assets of $5,000,000 or less at
the end of the calendar year. A tax is imposed on mutual property and casualty companies with
assets of $5,000,000 or less at the end of the calendar year. The rate of tax is equal to one percent
of gross premiums less return premiums on all direct business received by the insurer or agents of
the insurer in Minnesota, in cash or otherwise, during the year.
    Subd. 4. Mutual property and casualty companies with total assets less than
$1,600,000,000 on December 31, 1989. A tax is imposed on:
(1) mutual insurance companies that sell both property and casualty insurance that had total
assets greater than $5,000,000 at the end of the calendar year but that had total assets less than
$1,600,000,000 on December 31, 1989; and
(2) a mutual insurance company created pursuant to Laws 1983, chapter 287, article 2,
that sells only casualty insurance.
The rate of tax is equal to 1.26 percent of gross premiums less return premiums on all direct
business received by the insurer or agents of the insurer in Minnesota, in cash or otherwise,
during the year.
    Subd. 5. Health maintenance organizations, nonprofit health service plan corporations,
and community integrated service networks. (a) A tax is imposed on health maintenance
organizations, community integrated service networks, and nonprofit health care service plan
corporations. The rate of tax is equal to one percent of gross premiums less return premiums on all
direct business received by the organization, network, or corporation or its agents in Minnesota, in
cash or otherwise, in the calendar year.
(b) The commissioner shall deposit all revenues, including penalties and interest, collected
under this chapter from health maintenance organizations, community integrated service
networks, and nonprofit health service plan corporations in the health care access fund. Refunds of
overpayments of tax imposed by this subdivision must be paid from the health care access fund.
There is annually appropriated from the health care access fund to the commissioner the amount
necessary to make any refunds of the tax imposed under this subdivision.
    Subd. 6. Fire insurance tax. A tax is imposed on every licensed company, including
reciprocals or interinsurance exchanges, doing business in this state, except farmers' mutual fire
insurance companies and township fire insurance companies. The rate of tax is equal to one-half
of one percent of the gross fire premiums and assessments, less return premiums, on all direct
business received by the company in this state, or by its agents for it, in cash or otherwise, during
the year. "Gross fire premiums and assessments" includes premiums on policies covering fire risks
only on automobiles, whether written under floater form or otherwise.
    Subd. 7. Surplus lines tax. (a) A tax is imposed on surplus lines licensees. The rate of tax is
equal to three percent of the gross premiums less return premiums received by the licensee minus
any licensee association operating assessments paid under section 60A.208.
(b) If surplus lines insurance placed by a surplus lines licensee and taxed under this
subdivision covers a subject of insurance residing, located, or to be performed outside this state, a
proper pro rata portion of the entire premium payable for all of that insurance must be allocated
according to the subjects of insurance residing, located, or to be performed in this state.
    Subd. 8.[Repealed, 1Sp2001 c 5 art 13 s 15]
    Subd. 9. Tax on persons, firms, or corporations licensed to procure insurance from
unlicensed foreign companies. (a) A tax is imposed on any person, firm, or corporation licensed
under section 60A.19, subdivision 8. The rate of tax is equal to two percent of gross premiums
paid in the year less return premiums received in the year.
(b)(1) Money collected under this subdivision must be paid to a municipality or a fire
department relief association if:
(i) the money is attributable to fire, lightning, or sprinkler insurance premiums paid by an
owner to insure property; and
(ii) the property is in a municipality that has an organized fire department, a partly paid fire
department, or a volunteer fire department.
The money must be paid to the municipality where the insured property is located, or to the
municipality's fire department relief association. The money to be paid includes penalties and
interest collected because a property owner failed to pay on time the taxes due under this
subdivision.
(2) This paragraph does not apply to taxes paid under this subdivision that are attributable to
premiums paid on property if:
(i) the property is owned and occupied exclusively as a homestead, and the owner carries
insurance on the property; or
(ii) the property is exempt under section 550.37 and the owner carries insurance on the
property.
    Subd. 10. Tax on persons, firms, or corporations procuring insurance from an ineligible
company. (a) A tax is imposed on each insured in this state who procures, causes to be procured,
or continues or renews insurance with an ineligible surplus lines insurer or any self-insurer in this
state who procures or continues excess of loss, catastrophe, or other insurance upon a subject of
insurance resident, located, or to be performed within this state, other than insurance procured
pursuant to section 60A.201 or 60A.209, subdivision 1, equal to two percent of gross premiums
less return premiums paid for such insurance.
(b) If the insurance described in paragraph (a) also covers a subject of insurance residing,
located, or to be performed outside this state, for the purposes of this subdivision, a proper pro
rata portion of the entire premium payable for all of that insurance must be allocated according to
the subjects of insurance residing, located, or to be performed in this state.
(c) For the purposes of this subdivision, insurance placed with an ineligible surplus lines
insurer is considered to be procured, continued, or renewed in this state if:
(1) it was procured through negotiations occurring in whole or in part within or from outside
this state;
(2) it was procured by an application made in whole or in part within or from outside this
state; or
(3) premiums for it are paid from within this state directly or indirectly, in whole or in part.
    Subd. 11. Retaliatory provisions. (a) If any other state or country imposes any taxes, fines,
deposits, penalties, licenses, or fees upon any insurance companies of this state and their agents
doing business in another state or country that are in addition to or in excess of those imposed
by the laws of this state upon foreign insurance companies and their agents doing business in
this state, the same taxes, fines, deposits, penalties, licenses, and fees are imposed upon every
similar insurance company of that state or country and their agents doing or applying to do
business in this state.
(b) If any conditions precedent to the right to do business in any other state or country are
imposed by the laws of that state or country, beyond those imposed upon foreign companies by
the laws of this state, the same conditions precedent are imposed upon every similar insurance
company of that state or country and their agents doing or applying to do business in that state.
(c) For purposes of this subdivision, "taxes, fines, deposits, penalties, licenses, or fees"
means an amount of money that is deposited in the general revenue fund of the state or other
similar fund in another state or country and is not dedicated to a special purpose or use or
money deposited in the general revenue fund of the state or other similar fund in another state or
country and appropriated to the commissioner of commerce or insurance for the operation of the
Department of Commerce or other similar agency with jurisdiction over insurance. Taxes, fines,
deposits, penalties, licenses, or fees do not include:
(1) special purpose obligations or assessments imposed in connection with particular kinds
of insurance, including but not limited to assessments imposed in connection with residual market
mechanisms; or
(2) assessments made by the insurance guaranty association, life and health guarantee
association, or similar association.
(d) This subdivision applies to taxes imposed under subdivisions 1, 3, 4, 6, and 12, paragraph
(a), clauses (1) and (2).
(e) This subdivision does not apply to insurance companies organized or domiciled in a state
or country, the laws of which do not impose retaliatory taxes, fines, deposits, penalties, licenses,
or fees or which grant, on a reciprocal basis, exemptions from retaliatory taxes, fines, deposits,
penalties, licenses, or fees to insurance companies domiciled in this state.
    Subd. 12. Other entities. (a) A tax is imposed equal to two percent of:
(1) gross premiums less return premiums written for risks resident or located in Minnesota
by a risk retention group;
(2) gross premiums less return premiums received by an attorney in fact acting in accordance
with chapter 71A;
(3) gross premiums less return premiums received pursuant to assigned risk policies and
contracts of coverage under chapter 79;
(4) the direct funded premium received by the reinsurance association under section 79.34
from self-insurers approved under section 176.181 and political subdivisions that self-insure;
(5) gross premiums less return premiums received by a nonprofit health service plan
corporation authorized under chapter 62C; and
(6) gross premiums less return premiums paid to an insurer other than a licensed insurance
company or a surplus lines licensee for coverage of risks resident or located in Minnesota by a
purchasing group or any members of the purchasing group to a broker or agent for the purchasing
group.
(b) A tax is imposed on a joint self-insurance plan operating under chapter 60F. The rate
of tax is equal to two percent of the total amount of claims paid during the fund year, with no
deduction for claims wholly or partially reimbursed through stop-loss insurance.
(c) A tax is imposed on a joint self-insurance plan operating under chapter 62H. The rate of
tax is equal to two percent of the total amount of claims paid during the fund's fiscal year, with no
deduction for claims wholly or partially reimbursed through stop-loss insurance.
(d) A tax is imposed equal to the tax imposed under section 297I.05, subdivision 5, on the
gross premiums less return premiums on all coverages received by an accountable provider
network or agents of an accountable provider network in Minnesota, in cash or otherwise,
during the year.
    Subd. 13. Funds deposited into general fund. Unless otherwise specified in this chapter, all
amounts collected by the commissioner under this chapter must be deposited in the general fund.
    Subd. 14. Life insurance. A tax is imposed on life insurance. The rate of tax equals a
percentage of gross premiums less return premiums on all direct business received by the insurer
or agents of the insurer in Minnesota for life insurance, in cash or otherwise, during the year. For
premiums received after December 31, 2005, but before January 1, 2007, the rate of tax is 1.875
percent. For premiums received after December 31, 2006, but before January 1, 2008, the rate
of tax is 1.75 percent. For premiums received after December 31, 2007, but before January 1,
2009, the rate of tax is 1.625 percent. For premiums received after December 31, 2008, the
rate of tax is 1.5 percent.
History: 2000 c 394 art 1 s 2; 2000 c 490 art 13 s 20; 1Sp2001 c 5 art 14 s 8; 2002 c 377 art
10 s 25; 2002 c 379 art 1 s 70; 2005 c 151 art 8 s 17; 1Sp2005 c 3 art 6 s 18,19
NOTE: Subdivision 6 is repealed by Laws 2006, chapter 217, section 4, effective July
1, 2007. Laws 2006, chapter 217, section 5.

297I.06 SURCHARGES ON FIRE SAFETY PREMIUMS.
    Subdivision 1. Insurance policies surcharge. (a) Except as otherwise provided in
subdivision 2, each insurer engaged in writing policies of homeowner's insurance authorized
in section 60A.06, subdivision 1, clause (1)(c), or commercial fire policies or commercial
nonliability policies shall collect a surcharge equal to 0.65 percent of the gross premiums and
assessments, less return premiums, on direct business received by the company, or by its agents
for it, for homeowner's insurance policies, commercial fire policies, and commercial nonliability
insurance policies in this state.
    (b) The surcharge amount collected under paragraph (a) may not be considered premium
for any other purpose. The surcharge amount must be separately stated on either a billing or
policy declaration sent to an insured.
(c) Amounts collected by the commissioner under this section must be deposited in the fire
safety account established pursuant to subdivision 3.
    Subd. 2. Exemptions. (a) This section does not apply to a farmers' mutual fire insurance
company or township mutual fire insurance company in Minnesota organized under chapter 67A.
(b) An insurer described in section 297I.05, subdivisions 3 and 4, authorized to transact
business in Minnesota shall elect to remit to the Department of Revenue for deposit in the fire
safety account either (1) the surcharge amount collected under this section, or (2) a surcharge
of one-half of one percent on the gross fire premiums and assessments, less return premiums,
on all direct business received by the insurer or agents of the insurer in Minnesota, in cash or
otherwise, during the year.
(c) For purposes of this subdivision, "gross fire premiums and assessments" includes
premiums on policies covering fire risks only on automobiles, whether written or under floater
form or otherwise.
    Subd. 3. Fire safety account, annual transfers, allocation. A special account, to be known
as the fire safety account, is created in the state treasury. The account consists of the proceeds
under subdivisions 1 and 2. $468,000 in fiscal year 2008 and $2,268,000 in each year thereafter is
transferred from the fire safety account in the special revenue fund to the general fund to offset the
loss of revenue caused by the repeal of the one-half of one percent tax on fire insurance premiums.
The general fund base appropriation for the fire marshal program is reduced by $2,832,000 in
fiscal year 2008 and each year thereafter. The base funding for the fire marshal program from
the fire safety account in the special revenue fund shall be $2,832,000 in fiscal year 2008 and
each year thereafter.
History: 2006 c 217 s 1
NOTE: This section, as added by Laws 2006, chapter 217, section 1, is effective July 1, 2007,
and applies to policies written or renewed on or after that date. Laws 2006, chapter 217, section 5.

297I.10 SURCHARGE ON PREMIUMS TO RESTORE DEFICIENCY IN SPECIAL
FUND.
    Subdivision 1. Cities of the first class. (a) The commissioner shall order and direct a
surcharge to be collected of two percent of the fire, lightning, and sprinkler leakage gross
premiums, less return premiums, on all direct business received by any licensed foreign or
domestic fire insurance company on property in a city of the first class, or by its agents for it,
in cash or otherwise.
(b) By July 31 and December 31 of each year the commissioner of finance shall pay to the
relief association in each city a warrant for an amount equal to the total amount of the surcharge
on the premiums collected within the city since the previous payment.
(c) The treasurer of the relief association shall place the money received under this
subdivision in the special fund of the relief association.
    Subd. 2.[Repealed, 2002 c 392 art 1 s 9]
    Subd. 3. Appropriation. The amount necessary to make the payments required under this
section is appropriated to the commissioner of finance from the general fund.
    Subd. 4. Collection and administration. The commissioner shall administer the surcharge
imposed by this section in the same manner as the taxes imposed by this chapter.
History: 2000 c 394 art 1 s 3; 2005 c 151 art 2 s 16

297I.15 EXEMPTIONS FROM TAX.
    Subdivision 1. Government payments. Premiums under the Minnesota comprehensive
health insurance plan and all payments, revenues, and reimbursements received from the federal
government for Medicare-related coverage as defined in section 62A.3099 are not subject to
tax under this chapter.
    Subd. 2. Minnesota employees insurance program. To the extent that the Minnesota
employees insurance program under section 43A.317 operates as a self-insured group, the
premiums paid to the program are exempt from the taxes imposed under this chapter, but are
subject to a Minnesota Comprehensive Health Association assessment under section 62E.11.
    Subd. 3. Public employees insurance program. Premiums paid to the public employees
insurance program under section 43A.316 are exempt from the taxes imposed under this chapter.
    Subd. 4. Premiums paid to health carriers by state. A health carrier as defined in section
62A.011 is exempt from the taxes imposed under this chapter on premiums paid to it by the state.
Premiums paid by the state under medical assistance, general assistance medical care, and the
MinnesotaCare program are not exempt under this subdivision.
    Subd. 5. Minnesota Insurance Guaranty Association. The Minnesota Insurance Guaranty
Association under chapter 60C is exempt from the taxes imposed under this chapter.
    Subd. 6. Minnesota Life and Health Guaranty Association. The Minnesota Life and Health
Guaranty Association under chapter 61B is exempt from the taxes imposed under this chapter.
    Subd. 7. Minnesota Comprehensive Health Association. The Minnesota Comprehensive
Health Association under chapter 62E is exempt from the taxes imposed under this chapter.
    Subd. 8. Writing carrier for the comprehensive health insurance plan. Premiums
received by the writing carrier for the comprehensive health insurance plan established under
section 62E.10 in connection with that plan are exempt from the taxes imposed under this chapter.
    Subd. 9. Health Coverage Reinsurance Association. The Health Coverage Reinsurance
Association under chapter 62L is exempt from the taxes imposed under this chapter.
    Subd. 10. Premiums paid to fraternal benefit societies. Premiums paid to fraternal benefit
societies pursuant to chapter 64B are exempt from the taxes imposed under this chapter.
History: 2000 c 394 art 1 s 4; 1Sp2003 c 14 art 12 s 88,89; 2005 c 17 art 1 s 14

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 60C.01 to 60C.22; and any amount
paid for assessments made after July 31, 1994, under Minnesota Statutes 1992, sections 61B.01 to
61B.16, or under sections 61B.18 to 61B.32 as follows:
(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 60C.01 to 60C.22, and (ii) insurance companies
subject to assessment under Minnesota Statutes 1992, sections 61B.01 to 61B.16, or 61B.18
to 61B.32.
(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 60C.01 to 60C.22, Minnesota Statutes
1992, sections 61B.01 to 61B.16, and 61B.18 to 61B.32, 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, or 61B.24,
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
the state.
History: 2000 c 394 art 1 s 5; 1Sp2001 c 5 art 9 s 25; 2003 c 127 art 7 s 13

297I.25 INFORMATION RETURNS.
    Subdivision 1. Licensed brokers or agents of risk retention groups. To the extent
licensed agents or brokers are utilized in accordance with section 60E.12, they shall report to the
commissioner the premiums received for direct business for risks resident or located within this
state which the licensees have placed with or on behalf of a risk retention group not chartered in
this state.
    Subd. 2. Firetown and police premium reports. To the extent required by section 69.021,
each insurer shall file with the commissioner a Minnesota firetown premium report and Minnesota
aid to police premium report.
History: 2000 c 394 art 1 s 6

297I.30 DUE DATES FOR FILING RETURNS.
    Subdivision 1. General rule. On or before March 1, every insurer subject to taxation under
section 297I.05, subdivisions 1 to 6, and 12, paragraphs (a), clauses (1) to (5), and (b), shall file an
annual return for the preceding calendar year setting forth such information as the commissioner
may reasonably require on forms prescribed by the commissioner.
    Subd. 2. Surplus lines licensees and purchasing groups. On or before February 15 and
August 15 of each year, every surplus lines licensee subject to taxation under section 297I.05,
subdivision 7 , and every purchasing group or member of a purchasing group subject to tax under
section 297I.05, subdivision 12, paragraph (a), clause (6), shall file a return with the commissioner
for the preceding six-month period ending December 31, or June 30, setting forth any information
the commissioner reasonably prescribes on forms prescribed by the commissioner.
    Subd. 3.[Repealed, 1Sp2001 c 5 art 13 s 15]
    Subd. 4. Persons, firms, or corporations licensed to procure insurance from unlicensed
foreign companies. On or before 30 days following the expiration date of a license issued under
section 297I.05, subdivision 9, a person, firm, or corporation licensed to obtain insurance from a
company not authorized to do business in Minnesota shall file a return with the commissioner
for the preceding 12-month period setting forth any information the commissioner reasonably
requires on forms prescribed by the commissioner.
    Subd. 5. Joint self-insurance plans. On or before 60 days following the conclusion of their
fiscal year, a plan subject to tax under section 297I.05, subdivision 12, paragraph (b) or (c), shall
file a return with the commissioner for the preceding fiscal year setting forth any information the
commissioner reasonably requires on forms prescribed by the commissioner.
    Subd. 6. Persons, firms, or corporations procuring insurance from an unlicensed
foreign company. Within 30 days after the date the insurance was procured, continued, or
renewed, a taxpayer required to pay the tax under section 297I.05, subdivision 10, shall file a
return setting forth any information the commissioner reasonably requires on forms prescribed
by the commissioner.
    Subd. 7. Surcharge. (a)(1) By April 30 of each year, every company required to pay the
surcharge under section 297I.10, subdivision 1, shall file a return for the five-month period ending
March 31 setting forth any information the commissioner reasonably requires on forms prescribed
by the commissioner.
(2) By June 30 of each year, every company required to pay the surcharge under section
297I.10, subdivision 1, shall file a return for the two-month period ending May 31 setting forth
any information the commissioner reasonably requires on forms prescribed by the commissioner.
(3) By November 30 of each year, every company required to pay the surcharge under section
297I.10, subdivision 1, shall file a return for the five-month period ending October 31 setting forth
any information the commissioner reasonably requires on forms prescribed by the commissioner.
(b) By February 15 and August 15 of each year, every company required to pay a surcharge
under section 297I.10, subdivision 2, must file a return for the preceding six-month period ending
December 31 and June 30.
    Subd. 8. Fire insurance surcharge. On or before May 15, August 15, November 15, and
February 15 of each year, every insurer required to pay the surcharge under section 297I.06,
subdivisions 1 and 2, shall file a return with the commissioner for the preceding three-month
period ending March 31, June 30, September 30, and December 31, setting forth any information
the commissioner reasonably requires on forms prescribed by the commissioner.
History: 2000 c 394 art 1 s 7; 2002 c 379 art 1 s 71,72; 2006 c 217 s 2
NOTE: Subdivision 8, as added by Laws 2006, chapter 217, section 2, is effective July 1,
2007, and applies to policies written or renewed on or after that date. Laws 2006, chapter 217,
section 5.

297I.35 PAYMENT OF TAX.
    Subdivision 1. General rule. All taxes and surcharges imposed under this chapter must be
paid to the commissioner by the date that the return must be filed under section 297I.30.
    Subd. 2. Electronic payments. If the aggregate amount of tax and surcharges due under
this chapter during a calendar year is equal to or exceeds $120,000, or if the taxpayer is required
to make payment of any other tax to the commissioner by electronic means, then all tax and
surcharge payments in the subsequent calendar year must be paid by electronic means.
History: 2000 c 394 art 1 s 8; 1Sp2001 c 5 art 17 s 19

297I.40 ESTIMATED TAX.
    Subdivision 1. Requirement to pay. On or before March 15, June 15, September 15, and
December 15 of the current year, every taxpayer subject to tax under section 297I.05, subdivisions
1 to 6 , and 12, paragraphs (a), clauses (1) to (5), (b), and (e), must pay to the commissioner an
installment equal to one-fourth of the insurer's total estimated tax for the current year.
    Subd. 2. Amount of required installment. The amount of any required installment is
one-fourth of the lesser of
(1) 80 percent of the tax imposed for the current year, or
(2) 100 percent of the tax paid for the previous year.
    Subd. 3. No addition to tax where the tax is small. No addition to tax is imposed if the
total tax for the current tax year is $500 or less.
    Subd. 4. Addition to tax. (a) In case of any underpayment of installments by an insurer,
there is added to, and collected as part of, the tax for the taxable year an amount determined at the
rate specified in section 270C.40 upon the amount of underpayment.
(b) The amount of the underpayment is the excess of: (1) the amount of the installment; over
(2) the amount, if any, of the installment paid on or before the last date prescribed for payment.
(c) The period of the underpayment runs from the date the installment was required to be
paid to the earlier of:
(1) March 1 of the year following the close of the taxable year; or
(2) with respect to any portion of the underpayment, the date on which that portion is paid.
For purposes of this clause, a payment of estimated tax on any installment date is considered a
payment of any previous underpayment only to the extent the payment exceeds the amount of the
installment required to be made on that date.
    Subd. 5. Definition of tax. The term "tax" as used in this section means the tax imposed
by section 297I.05, subdivisions 1 to 6, and 12, paragraphs (a), clauses (1) to (5), (b), and (e),
without regard to the retaliatory provisions of section 297I.05, subdivision 11, and the offset in
section 297I.20.
    Subd. 6. Failure to pay estimated tax. When an insurer does not make any payments, the
period of the underpayment runs from the three installment dates set forth in subdivision 1 to
whichever of the periods in subdivision 4, paragraph (c), is the earlier.
    Subd. 7. March estimated payment. A taxpayer who claims a refund of an overpayment
on an original return may elect to have all or any portion of the overpayment applied as a credit
to the March 15 estimated tax payment for the year following the year of the return. The credit
is considered applied on March 15. Notwithstanding section 297I.80, the amount credited does
not bear interest.
History: 2000 c 394 art 1 s 9; 1Sp2001 c 5 art 13 s 10-12; 2005 c 151 art 2 s 17

297I.45 [Repealed, 2005 c 151 art 1 s 117]

297I.50 [Repealed, 2005 c 151 art 1 s 117]

297I.55 [Repealed, 2005 c 151 art 1 s 117]

297I.60 CLAIMS FOR REFUND.
    Subdivision 1. General right to refund. (a) Subject to the requirements of this section and
section 297I.70, if a taxpayer has paid a tax or surcharge in excess of the amount due and files a
written claim for refund, the commissioner shall refund or credit the overpayment determined
by the commissioner to be erroneously paid.
(b) The claim must specify the name of the taxpayer, the date when and the period for which
the tax or surcharge was paid, the kind of tax or surcharge paid, the amount that the taxpayer
claims was erroneously paid, the grounds on which a refund is claimed, and other information
relative to the payment. The claim must be in the form required by the commissioner. A return or
amended return claiming an overpayment constitutes a claim for refund.
(c) The commissioner shall determine the amount of refund, if any, that is due, and notify the
taxpayer of the determination as soon as practicable after a claim has been filed. Notice must be
mailed to the taxpayer at the address stated upon the return or claim for refund.
(d) If the amount of tax or surcharge paid by the taxpayer exceeds the amount of tax or
surcharge imposed on the taxpayer, the amount of excess is considered an overpayment even if in
fact there was no liability with respect to which the amount was paid.
(e) When in the course of an examination and within the time for requesting a refund,
the commissioner determines that there has been an overpayment of tax or surcharge, the
commissioner shall refund or credit the amount of the overpayment to the taxpayer and no
return is necessary.
(f) Notwithstanding any law to the contrary, the commissioner is not required to refund or
credit any overpayment of less than one dollar.
(g) There is appropriated to the commissioner the amounts necessary to make refunds
required by this section. The funds are appropriated from the same fund to which the tax or
surcharge being refunded was originally deposited.
    Subd. 2. Remedies. (a) If the taxpayer is notified that the refund claim is denied in whole or
in part, the taxpayer may contest the denial by:
(1) filing an administrative appeal with the commissioner under section 270C.35;
(2) filing an appeal in Tax Court within 60 days of the date of the notice of denial; or
(3) filing an action in the district court to recover the refund.
(b) An action in the district court must be brought within 18 months following the date of the
notice of denial. An action for refund of tax or surcharge must be brought in the district court
of the district in which lies the taxpayer's principal place of business or in the District Court for
Ramsey County. If a taxpayer files a claim for refund and the commissioner has not issued a
denial of the claim, the taxpayer may bring an action in the district court or the Tax Court at any
time after the expiration of six months from the time the claim was filed.
History: 2000 c 394 art 1 s 13; 2001 c 7 s 61; 2005 c 151 art 2 s 17

297I.65 LIMITATIONS OF TIME FOR ASSESSMENT OF TAX.
    Subdivision 1. General rule. Except as otherwise provided, the amount of taxes or
surcharges assessable must be assessed within 3-1/2 years after the date the return is filed.
    Subd. 2. Filing date. For purposes of this section, a return filed before the last day prescribed
by law for filing the return is considered to be filed on the last day.
    Subd. 3. False or fraudulent return. Notwithstanding the limitation under subdivision 1,
the tax or surcharge may be assessed at any time if a false or fraudulent return is filed or when a
taxpayer fails to file a return.
History: 2000 c 394 art 1 s 14

297I.70 LIMITATION ON CLAIMS FOR REFUND.
Except as provided in section 297I.75, a claim for refund of an overpayment must be filed
within 3-1/2 years from the date prescribed for filing the return, or one year from the date of an
order assessing tax or surcharge, or one year from the date of a return filed by the commissioner,
upon payment in full of the tax, surcharge, penalties, and interest shown on the order or return
made by the commissioner, whichever period expires later. Claims for refund filed after the
3-1/2-year period but within the one-year period are limited to the amount of tax, surcharge,
penalties, and interest on the order or return made by the commissioner and to issues determined
by the order or return made by the commissioner.
History: 2000 c 394 art 1 s 15

297I.75 CONSENT TO EXTEND TIME.
If before the expiration of the time prescribed in sections 297I.65 and 297I.70 for the
assessment of tax or surcharge or the filing of a claim for refund, the commissioner and the
taxpayer have consented in writing to the assessment or filing of a claim for refund after that
time, the tax or surcharge may be assessed at any time before the expiration of the agreed-upon
period and a claim for refund may be paid at any time before the expiration of the agreed-upon
period plus six months. The period may be extended by later agreements in writing before the
expiration of the period previously agreed upon.
History: 2000 c 394 art 1 s 16

297I.80 INTEREST.
    Subdivision 1. Payable to the commissioner. (a) When interest is required under this
section, interest is computed at the rate specified in section 270C.40.
(b) If a tax or surcharge is not paid within the time named by law for payment, the unpaid
tax or surcharge bears interest from the date the tax or surcharge should have been paid until
the date the tax or surcharge is paid.
(c) Whenever a taxpayer is liable for additional tax or surcharge because of a redetermination
by the commissioner or other reason, the additional tax or surcharge bears interest from the time
the tax or surcharge should have been paid until the date the tax or surcharge is paid.
(d) A penalty bears interest from the date the return or payment was required to be filed
or paid to the date of payment of the penalty.
    Subd. 2. On overpayments. (a) When interest is required under this section, interest is
computed at the rate specified in section 270C.405.
(b) Interest on an overpayment is computed from the date of the payment of the tax or
surcharge until the date the refund is made. For purposes of this subdivision, any payment made
before the last day prescribed by law to make the payment, including any estimated tax payments,
is considered paid on the last day prescribed by law for the payment. A return filed before the
due date is considered as filed on the due date.
History: 2000 c 394 art 1 s 17; 2005 c 151 art 2 s 17

297I.85 CIVIL PENALTIES.
    Subdivision 1. Late filing penalty. If a taxpayer fails to file a return within the time
prescribed, a penalty of five percent of the amount of tax or surcharge not timely paid is added to
the tax or surcharge.
    Subd. 2. Late payment penalty. If a taxpayer fails to pay a tax or surcharge within the
time specified for payment, a penalty must be added to the amount required to be shown as tax
or surcharge. The penalty is five percent of the tax or surcharge not paid on or before the date
specified for payment of the tax or surcharge if the failure is for not more than 30 days, with an
additional penalty of five percent of the amount of tax or surcharge remaining unpaid during
each additional 30 days or fraction of 30 days during which the failure continues, not exceeding
15 percent in the aggregate.
    Subd. 3. Intent to evade. If a taxpayer, with intent to evade the tax or surcharge imposed by
this chapter, fails to file any return required by this chapter, or with such intent files a false or
fraudulent return, a penalty is imposed on the taxpayer. The penalty is equal to 50 percent of the
tax or surcharge, less amounts paid by the taxpayer on the basis of the false or fraudulent return
and is due for the period to which the return related.
    Subd. 4. Negligence or intentional disregard; penalty. If any part of an additional
assessment is due to negligence or intentional disregard of the statute or a rule but without intent
to defraud, there is added to the tax or surcharge a penalty equal to ten percent of the additional
assessment.
    Subd. 5. Payment of penalties. The penalties imposed by this section must be collected and
paid in the same manner as taxes.
    Subd. 6. Penalties are additional. The civil penalties imposed by this section are in addition
to the criminal penalties imposed by this chapter.
    Subd. 7. Penalty for failure to pay electronically. In addition to other applicable penalties
imposed by this section, if the commissioner notifies the taxpayer that payments are required to be
made by electronic means, and the payments are made by some other means, a penalty is imposed.
The amount of the penalty is equal to five percent of each payment that should have been paid
electronically. After the commissioner's initial notification to the taxpayer that payments are
required to be made by electronic means, the commissioner is not required to notify the taxpayer
in subsequent periods if the initial notification specified the amount of tax liability at which a
taxpayer is required to remit payments by electronic means. The penalty may be abated under
the abatement procedures prescribed in section 270C.34, subdivision 2, if the failure to pay
electronically is due to reasonable cause.
History: 2000 c 394 art 1 s 18; 1Sp2001 c 5 art 17 s 20; 2005 c 151 art 2 s 17

297I.90 CRIMINAL PENALTIES.
    Subdivision 1. Penalties for knowing failure to file or pay; willful evasion. (a) If a person
is required to file with the commissioner a return, report, or other document, and that person
fails to file it when required and does so knowingly, rather than accidentally, inadvertently, or
negligently, that person is guilty of a gross misdemeanor.
(b) If a person is required to file with the commissioner a return, report, or other document,
and that person willfully attempts in any manner to evade or defeat a tax or surcharge by failing to
file it when required, that person is guilty of a felony.
(c) If a person is required to pay or to collect and remit a tax or surcharge, and that person
knowingly, rather than accidentally, inadvertently, or negligently, fails to do so when required,
that person is guilty of a gross misdemeanor.
(d) If a person is required to pay or to collect and remit a tax or surcharge, and that person
willfully attempts to evade or defeat a tax or surcharge by failing to do so when required, that
person is guilty of a felony.
    Subd. 2. False or fraudulent returns; penalties. (a) A person who files with the
commissioner a return, report, or other document known by the person to be fraudulent or false
concerning a material matter is guilty of a felony.
(b) A person who knowingly aids or assists in, or advises in the preparation or presentation of
a return, report, or other document that is fraudulent or false concerning a material matter, whether
or not the falsity or fraud committed is with the knowledge or consent of the person authorized or
required to present the return, report, or other document, is guilty of a felony.
History: 2000 c 394 art 1 s 19

297I.95 [Repealed, 2005 c 151 art 1 s 117]