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Ezel / Tax Rulings / VA
VA P.D. 14-74 Insurance Issues 2014-05-29

What late-filing penalty policy did Virginia announce for surplus-lines brokers filing annual Form 802?

Short answer: For the policy announced in 2014, Virginia capped the $50-per-day Form 802 late-filing penalty at $250 for a first offense and $500 for a second offense. A third or later offense remained subject to the full statutory daily penalty. The annual surplus-lines reconciliation report was due March 1.

Apply this to your situation

This page answers the general question as of 2014. Ezel answers yours, under current Virginia tax law, with citations.

Currency note: this ruling is from 2014
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is Virginia Tax Bulletin 14-3, a general Department penalty policy published in 2014 rather than a taxpayer-specific ruling. It followed the former State Corporation Commission's administrative caps after responsibility transferred to the Department. Brokers should verify the current Form 802 deadline, statute, and penalty-administration policy before relying on these historical amounts. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Subject

Late Filing Penalty for Surplus Lines Brokers

Plain-English summary

Virginia announced that it would cap the statutory $50-per-day late-filing penalty at $250 for a surplus-lines broker's first offense and $500 for a second offense. For any later offense, the Department would impose the full daily penalty.

Surplus-lines brokers had to file the Virginia Surplus Lines Broker's Annual Reconciliation Tax Report, Form 802, by March 1 each year. Administration of the Insurance Premiums License Tax had moved from the State Corporation Commission to the Department for tax years beginning on or after January 1, 2013.

The Department adopted the SCC's prior administrative caps to maintain consistent treatment after the transfer. The underlying statute still set the general $50-per-day rule.

What this means for you

  • The bulletin described a 2014 administrative cap, not a change to the statutory daily amount.
  • First and second offenses received limited caps; subsequent offenses did not.
  • Confirm current filing dates and penalty policy before using the historical rule.

Citations and references

  • Va. Code § 38.2-4809 A3.

Source

Original ruling text

TAX BULLETIN 14-3

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.

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