Please note the surplus lines changes in Minnesota as noted below.

Placement Fees
Effective Au­gust 1, 2010, placement fees are no longer excluded from the surplus lines tax.  As a result, when com­pleting Form IG260, page 2, for the period ending December 31, 2010, only complete columns K and L for policies with an ef­fective date before August 1, 2010.

Form IG260 (Rev. 6/10) reflects this law change and is available on the Minnesota website.

Gross Premiums
A new paragraph has been added to the definition of “gross premi­ums.”   It reads “Gross premiums” for surplus lines insurance includes all related charges, commissions, and fees received by the licensee. Gross premiums do not include the stamping fee or the operating assessment.

Statute of Limitations
If it is determined that 25 % or more of tax or surcharge was omitted from an initially filed return, the state has 6.5 years from the due date of that return or the date the return was filed, whichever is later, to audit the return.  This is effective for insurance taxes or surcharges due after December 31, 2010

 Other Items of Interest
The 2011 Form IG260, Semiannual State­ment of Surplus Lines Insurance, will no longer have a column for a 2 percent rate. All business placed by surplus lines licensees is taxed at 3% for both eligible and ineligible insurers.  This change takes effect on January 1, 2011.

 The tax on all other insurance business placed with unauthorized insurers remains at 2 % of the gross premiums paid for the policy.

The insurance licensing information provided on this blog is not legal advice and the reader is advised to consult an attorney regarding application of this information in any particular situation.

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