California State Automobile Ass'n v. State Board of Equalization

*15 Opinion

The California State Automobile Association, Inter-Insurance Bureau (hereinafter “the Bureau”) claimed deductions in its 1964 California gross premium tax return for amounts credited as savings to the accounts of their subscribers (policy holders) whose insurance policies did not expire until 1965. In previous years the Bureau had claimed such deduction for the year in which the policy expired. The State Board of Equalization (hereinafter the “Board”) disallowed the deductions in the 1964 tax return attributable to policies expiring in 1965 but allowed them as deductions in the tax return for the year 1965. The Bureau paid the deficiency assessment resulting from said disallowance under protest and then filed the instant action to recover the amount thereof with interest. After the trial judgment was entered that the Bureau take nothing. The Bureau appeals from said judgment.

The Bureau is a reciprocal interinsurance exchange organized under and existing by virtue of the laws of the State of California. Its business is conducted pursuant to the provisions of division 1, part 2, chapter 3 (§§ 1280 to 1540, inclusive) of the Insurance Code relating to reciprocal…