Minnesota set to apply procurement tax to captives
The Minnesota Department of Revenue (MDR) has proposed changes to Form IG255 that will mean individuals or businesses buying insurance directly from captives or other non-admitted insurers must report their non-admitted direct procured insurance premium tax.
MDR said the proposed changes clarify the definition of "nonadmitted insurance" and the types of direct procured insurance policies that must be reported to the tax authorities.
“In addition to surplus lines policies purchased directly from nonadmitted insurance companies - purchased without the assistance of a surplus lines broker - premiums paid to a captive insurance company must also be reported on Form IG255,” MDR said.
Taxpayers that are required to file and pay self-procured insurance tax should file Form IG255 and pay the tax by March 1. The filing can only be made by paper but payment can be made electronically through the Minnesota government’s e-Services system.