Transamerica Occidental Life Insurance Co. v. State Board of Equalization

—Defendant California State Board of Equalization (Board) appeals from the judgment for plaintiff Transamerica Occidental Life Insurance Company (TOLIC) entered after the trial court overruled the Board’s demurrer and granted TOLIC’s summary adjudication of issues motion. The sole issue on appeal is which of two tax rates in Revenue and Taxation Code section 12202 applies to insurance premiums for nonpension and nonprofit-sharing plans exempt or qualified under section 501(a) of the United States Internal Revenue Code. The trial court ruled that the lower rate applied to all premiums from policies exempt under section 501(a) whether or not the policies were pension or profit-sharing plans. We conclude the lower rate applies only to pension and profit-sharing plans exempt under section 501(a). As the trial court erred in applying the lower rate to TOLIC’s nonpension and nonprofit-sharing plans exempt under section 501(a), we reverse and direct the trial court to deny TOLIC’s summary adjudication of issues motion, sustain the Board’s demurrer without leave to amend, and enter judgment for the Board.

Facts

Subject to certain inapplicable exceptions, California taxes…