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Chapter 297I

Section 297I.05

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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.

Official Publication of the State of Minnesota
Revisor of Statutes