California Compensation & Fire Co. v. State Board of Equalization

By this decision, we establish January 1, 1977, as the effective and operative date of the constitutional amendment which eliminated the principal office deduction for real estate taxes paid by insurance companies. We reverse the judgment of the trial court which had affirmed the ruling of the California State Board of Equalization (hereinafter respondent) that the amendment was effective January 1, 1976. We adopt the contention of California Compensation and Fire Company and Golden State Mutual Life Insurance Company (hereinafter appellants) and Allstate Insurance Company and State Farm Mutual Automobile Insurance Company (hereinafter amici curiae) that the amendment was not effective until January 1, 1977. These conflicting positions arose out of the following sequence of events:

Since 1933, the California Constitution has provided for the taxation of insurance companies by a tax assessed on gross premiums received. In 1975, article XIII, section 28 of the California Constitution provided at subdivision (e): “Each insurer shall have the right to deduct from the annual tax imposed by this section upon such insurer in respect to a particular year the amount of real…