Tax on Insurers (Insurance Tax)

The insurance tax program is jointly administered by the Board of Equalization (BOE), California Department of Tax and Fee Administration (CDTFA), Department of Insurance (CDI) and the Office of the State Controller (SCO).

Insurance companies that have received authority from the Department of Insurance (CDI) to transact insurance business in California are called "admitted insurers" and may be subject to as many as three insurance taxes in California.

All insurance companies are subject to a tax on gross premiums. In addition, one of the schedules in the gross premiums tax return is used for the computation of retaliatory tax, which is the second tax that an insurance company may owe. A retaliatory tax is owed when an insurance company domiciled in another state imposes higher taxes and fees on a California-domiciled insurer for the same business.

The third insurance tax on insurance companies is ocean marine tax.

Surplus Line Brokers, who are licensed brokers that sell policies for non-admitted (non-licensed) insurance companies, also pay a tax (3.00%).

As part of an interagency agreement, CDTFA has the responsibility to issue deficiency assessments, refunds, and evaluate appeals on behalf of the BOE. Appeals of claims for refund or details of claims for redetermination will continue to be heard by the BOE.

For additional information on the program's administration, please visit CDTFA's website on the Tax on Insurers and Tax on Insurers – Frequently Asked Questions. For more information on appeals, please visit Appeals Information. For detailed information regarding rates, please contact the CDI at 1-800-927-4357 or visit their website at www.insurance.ca.gov.

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