Virginia Tax has been charged with the administration and collection of premiums license tax forms and payments. This tax is imposed on all insurers and surplus lines brokers that are licensed in this Commonwealth by the State Corporation Commission's Bureau of Insurance.
Who is subject to the tax?
Insurance companies, as defined under Va. Code § 58.1-2500, engaged in the business of making contracts of insurance, companies that provide travel insurance, and Surplus Lines brokers defined under Va. Code § 38.2-4805.2, authorized to solicit, negotiate and place insurance with eligible or approved surplus lines insurers.
General Filing Information
|Taxpayer||Filing Requirement||Due Date|
|Insurance Company||Quarterly Estimated Payments
|Annual Tax Return
|Surplus Lines Broker||Quarterly Estimated Payments
|Annual Tax Return
File all subsequent tax reports with Virginia Tax, including declarations of estimated payments.
Any insurance company or surplus lines broker commencing business in Virginia is required to register with Virginia Tax. In addition to registration, all insurance companies, except Risk Retention Groups, are required to pay us an initial declaration of estimated insurance premiums license tax for the calendar year before the Bureau of Insurance issues the license. The initial insurance premiums license tax liability on an insurance company shall be measured by an estimate of direct gross premium income reasonably expected to be derived from such business conducted in Virginia from commencement to December 31.
Insurance companies and surplus lines brokers can register and pay the initial declaration of estimated insurance premiums license tax, if applicable, online. If you are unable to complete your registration online, the Business Registration Application (Form R-1) and Declaration of Estimated Premiums License Tax (Form R-1A) are available to download and print or paper submission.
Any insurance company whose annual direct gross Premiums License Tax liability is expected to exceed $3,000 (after tax credits) is required to file estimated tax payments throughout the year. An insurance company whose annual direct gross Premiums License Tax liability is expected to be less than $3,000 is not required to file estimated tax payments with us. However, all insurance companies are required to file an annual Insurance Premiums License Tax return (Form 800), due March 1 of the following year.
Insurance companies' estimated payments are due the 15th day of April, June, September and December, and should be submitted with Form 800ES, Insurance Premiums License Tax Estimated Payment Vouchers. Payment and Form 800ES should be submitted electronically, using the Department's eForms or Online Services for Businesses applications, or by ACH Credit. If you are unable to submit your payments electronically, forms for paper submission are available to download and print for paper submission.
Form 800, Insurance Premiums License Tax Return and Accompanying Schedules are available to download for paper submission.
Surplus Lines Brokers Reports
A surplus lines broker is required to file a quarterly tax report and make a payment if:
- Its annual Insurance Premiums License Tax liability can reasonably be expected to exceed $1,500 and,
- During the quarter, it derived direct gross premium income from policies for insured parties whose home state is the Commonwealth of Virginia.
A surplus lines broker is not required to file the quarterly tax report if its annual tax liability is not expected to exceed $1,500 or if it did not have a tax liability for the current period. No report is required for a quarter if there is a credit from a prior period or returned premiums within the same taxable year that equals or exceeds the amount of the tax liability for the current period.
Surplus Lines Brokers Quarterly Tax Reports, Form 801, are due on the 30th day of April, July, October and January. Surplus lines brokers should submit quarterly tax reports and payments electronically via eForms. If you are unable to submit your quarterly tax report Form 801 electronically, you may file paper returns.
All Surplus Lines Brokers, who held a license during the reporting year, whether or not business was transacted, must file an Annual Reconciliation Tax Report, Form 802, due on or before March 1 of the following year. Form 802 is available to file electronically via eForms or as a fillable form.
Retaliatory Tax Credit
Virginia allows a retaliatory costs tax credit (Va. Code § 58.1-2510) against the insurance premiums license tax for qualified domestic insurance companies in an amount equal to the retaliatory costs incurred during the corresponding taxable year as a result of the difference between the lower tax rates and costs imposed by other states and the tax rates and costs imposed by the Commonwealth of Virginia. To qualify for the credit, taxpayers must maintain a certain number of qualified full-time employees. Insurance companies are required to file Schedule RET CR, Virginia Application for Credit of Excess Tax Based on Retaliatory Cost, which must be signed by an independent certified public accountant. The application is due by March 1 following the close of the previous calendar year.
Any insurance company whose annual direct gross premiums license tax liability is expected to exceed $3,000 (after tax credits), is required to make estimated tax payments. Estimated payments are due on or before the 15th day of April, June, September and December. Our eForms and Online Services for Businesses applications are secure options for submitting estimated payments electronically. If you are unable to submit your estimated payment electronically, Form 800ES, Insurance Premiums License Tax Estimated Payment Vouchers, is available to download and print for paper submission.
The date the declaration is to be filed, number of payment installments and amount of estimated tax to be paid is determined in accordance with the following table:
|If the requirements are first met||The declaration shall be on or before||The number of installments to be paid is||The following percentage of the estimated tax shall be paid on or before the 15th day of|
|before the 1st day of the 4th month of the taxable year||April 1 of the taxable year||4||25%||25%||25%||25%|
|after the last day of the 3rd month and before the 1st day of the 6th month of the taxable year||after March 31 but before June 1 of the taxable year||3||-||33%||33%||33%|
|after the last day of the 5th month and before the 1st day of the 9th month of the taxable year||after May 31 but before September 1 of the taxable year 2||2||-||-||50%||50%|
|after the last day of the 8th month and before the 1st day of the 12th month of the taxable year||after August 31 but before December 1 of the taxable year||1||-||-||-||100%|
In case of any underpayment of estimated Insurance Premiums License Tax by an insurance company, an addition to the tax shall be imposed in the form of interest that will begin accruing on the amount of the underpayment. The interest rate is equal to the federal interest rate plus 2%. This interest rate is applied to the underpayment. If the insurance company's underpayment of estimated tax is the result of a qualified exception and the addition to the tax should not be imposed, Form 800C, Underpayment of Virginia Estimated Insurance Premiums License Tax, is required and must be attached to the company's Insurance Premiums License Tax annual return.
Fines, Penalties, and Interest
Late Filing Fine
Any insurance company that fails to file their annual tax report, Form 800, Virginia Insurance Premiums License Tax Report (due March 1 following the close of the previous calendar year) will be subject to a late filing fine of $50 per day for each day's failure to submit the report.
Any surplus lines broker that fails to file their annual report, Form 802, Surplus Lines Brokers Annual Reconciliation Tax Report, (due March 1 following the close of the previous calendar year), will be subject to a late filing fine of $50 per day for each day's failure to submit the report.
Late Payment Penalty
Any insurance company or surplus lines broker that fails to pay the Insurance Premiums License Tax by the March 1 due date is subject to a ten percent penalty that shall be added to the amount of the unpaid tax liability.
In the event that an insurance company or surplus lines broker fails to pay its insurance premiums license tax, the Commission may suspend or revoke the license to conduct business in the Commonwealth of Virginia pursuant to Va. Code § 38.2-1857.7 upon notification from us.
In addition to other penalties provided by law, any licensed surplus lines broker or any person required to be licensed as a surplus lines broker who willfully fails or refuses to pay the full amount of the tax required by Chapter 48 of Title 38.2, either by themselves or through their agents or employees, or who makes a false or fraudulent return with intent to evade the tax hereby levied, or who makes a false or fraudulent claim for refund, shall be guilty of a Class 1 misdemeanor.
Virginia law requires us to assess interest on any balance of unpaid tax, from the payment due date through the date the tax is paid. Interest charges apply to late payments and payments made with amended returns, as well as to additional balances due or assessed as the result of audit adjustments.
Va. Code § 58.1-15 sets the interest rate for late payments at the federal underpayment rate established under Internal Revenue Code Section § 6621, plus 2 percent. For the current daily interest rate, contact us at 804.367.8037.
Surplus Lines Brokers
All surplus lines brokers are required to file an annual report by March 1 reporting the direct gross premium income derived from policies for insured parties whose home state is Virginia during the preceding year ending December 31. Upon the failure of any surplus lines broker to pay the annual insurance premiums license tax due with the annual report, interest is assessed at the rate of interest established pursuant to Va. Code § 58.1-15 for the period between the due date of the annual report and the date of full payment.
Any corporate, partnership or limited liability officer may be held personally liable for unpaid taxes assessed against a corporation or partnership.
The term "corporate, partnership or limited liability officer" includes an officer or employee of a corporation, or a member, manager or employee of a partnership or limited liability company, who is under a duty to collect, account for or pay the assessed tax, who had knowledge of the failure to pay the tax, and who had authority to prevent the failure. See Va. Code § 58.1-1813.