Bulletin Number
VTB 14-3
Tax Type
Insurance Issues
Description
Late Filing Penalty for Surplus Lines Brokers
Topic
Insurance Issues
Penalties
Reports
Date Issued
05-29-2014
TAX BULLETIN 14-3
Virginia Department of Taxation
May 29, 2014
Late Filing Penalty for Surplus Lines Brokers
Virginia Department of Taxation
May 29, 2014
Late Filing Penalty for Surplus Lines Brokers
Surplus lines brokers are required to file the Virginia Surplus Lines Broker’s Annual Reconciliation Tax Report, Form 802, with the Department of Taxation (“the Department”) by March 1 of each year. If a surplus lines broker fails to file such report by March 1, it is generally subject to a $50 fine for each day that the report is late. See Va. Code § 38.2-4809 A3.
During the 2011 Session, the General Assembly transferred the administration of the Insurance Premiums License Tax from the State Corporation Commission (“SCC”) to the Department for taxable years beginning on or after January 1, 2013. Prior to the transfer, the SCC administratively capped the late filing penalty on surplus lines brokers at $250 for a first offense and $500 for a second offense. For any subsequent offenses, the SCC imposed the full late filing penalty on surplus lines brokers.
In order to maintain consistency with the SCC’s policy of capping the late filing penalty on surplus lines brokers, the Department will also cap the late filing penalty at $250 for a first offense and $500 for a second offense. For any subsequent offenses, the Department will impose the full late filing penalty on surplus lines brokers pursuant to Va. Code § 38.2-4809 A3.
If you have additional questions, please visit the Department’s website at http://www.tax.virginia.gov, or contact the Department at (804) 404-4163.
Tax Bulletins