WESTERN & SOUTHERN LIFE INSURANCE CO. V. STATE BOARD OF EQUALIZATION OF CALIFORNIA 451 U.S. 648 (1981) CASE BRIEF

WESTERN & SOUTHERN LIFE INSURANCE CO. V. STATE BOARD OF EQUALIZATION OF CALIFORNIA
451 U.S. 648 (1981)
NATURE OF THE CASE: This was a dispute over a retaliatory tax imposed by California against out of state insurance companies.
FACTS: Section 685 of the California Insurance Code imposes a retaliatory tax on out-of-state insurers doing business in California when the insurer's State of incorporation imposes higher taxes on California insurers doing business in that State than California would otherwise impose on that State's insurers doing business in California. Western & Southern (P), an Ohio corporation headquartered in Ohio, has engaged in the business of insurance in California since 1955. During the years in question, the company paid a total of $977,853.57 to the State in retaliatory taxes. After unsuccessfully filing claims for refunds with appellee Board of Equalization, P initiated this refund suit in Superior Court, arguing that California's retaliatory tax violates the Commerce and Equal Protection Clauses of the United States Constitution. The Superior Court ruled that the retaliatory tax is unconstitutional. It ordered a full refund of retaliatory taxes paid, plus interest and costs. The California Court of Appeal reversed. The California Supreme Court denied a petition for hearing.

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