Franklin Life Ins. Co. v. State Board of Equalization

Asserting the unconstitutionality of the retaliatory tax statute (Ins. Code, 685) or, in the alternative, its unconstitutional application in the instant case, plaintiff Franklin Life Insurance Company (hereinafter called the Company) sought unsuccessfully in the trial court to recover taxes assessed by defendant State Board of Equalization (hereinafter called the Board). More specifically, the Company contends: (1) the retaliatory tax statute conflicts with the constitutional provision authorizing the retaliatory tax; (2) the Board improperly computed the retaliatory tax imposed upon the Company; and (3) the Board's application of the tax denies the Company equal protection of the laws. For the reasons explained below we conclude that none of these arguments may prevail.

Subdivisions (a)-(d), section 14 4/5, article XIII of the California Constitution provide that insurance companies doing business in California are to be annually taxed at the rate of 2.35 per cent of the "amount of gross premiums, less return premiums, received in such year by such insurer upon its business done in this State, other than premiums received for reinsurance and for ocean marine…