Pacific Mutual Life Insurance v. State Board of Equalization

Plaintiffs are certain life insurance companies who filed suit to challenge, on various grounds, the authority of the California State Board of Equalization (the Board) to impose on them new insurance premiums tax rates for the years 1989 and 1990. Plaintiffs also challenge the method of calculation which the Board used to determine the new tax rates for those years. The trial court determined the Board did have the authority to revise the insurance premiums tax rate previously set by the Legislature. The court also determined the revised tax rate imposed on plaintiffs by the Board for 1989 was properly calculated but the revised tax rate imposed for 1990 was not. On that basis, it determined the Board must refund substantial amounts of money to the plaintiffs for overpayment of taxes. The Board appeals from the portions of the judgment which (1) invalidated its 1990 revised tax rate, (2) ordered it to refund money to plaintiffs, and (3) determined that plaintiffs are entitled to recover their attorney fees.

Plaintiffs have cross-appealed. They contend (1) the section of the Revenue and Taxation Code under which the Board revised the insurance premiums tax rates (§…