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.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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