Insurance Tax Guide

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

The CDTFA's responsibilities regarding the Insurance Tax Program include issuing deficiency assessments, refunds, and evaluating appeals. Detailed appeals procedures are available in publication 17, Appeals Procedures. For detailed information regarding rates, please contact the CDI at 800-927-4357 or visit their website at www.insurance.ca.gov.

Insurance Tax

Insurers

Insurance companies approved by the California Department of Insurance (CDI) to transact insurance business in California are called admitted insurers. Admitted insurers may be subject to as many as three insurance taxes in California: For purposes of this tax guide, we will refer to admitted insurers as “insurers.”

  • Tax on gross premiums – All insurance companies are subject to tax on gross premiums.
  • A retaliatory tax – One of the schedules in the gross premiums tax return is used for the computation of retaliatory tax, owed when an insurance company is domiciled in another state which imposes higher taxes and fees on a California-domiciled insurer for the same business.
  • Ocean marine tax – The ocean marine tax applies to insurers transacting the business of ocean marine insurance in California.

Surplus Line Brokers

Licensed surplus line brokers pay a tax based on a percentage of gross premiums charged on business done in California. (Ins Code 1760 – 1780.)

How the Revenue is Used

Insurance tax revenues are deposited into the Insurance Tax Fund of the State Treasury. After refunds are drawn from the fund, the balance is transferred to the state's General Fund. (RTC 13151-13153.)

How to Use This Guide

The Getting Started section provides key information related to registration, filing returns, making payments, and other important information you need.

The Industry Topics section contains specific topics important to the insurance tax program.

The Resources section provides links to helpful information, including law and regulation information, publications, special notices, and information on how to contact us.

If You Need Help

See the How to Contact Us page for contact information.

If you have suggestions for improving this guide, please contact us by email.

Insurers

The taxes on insurers are annual taxes imposed on insurance companies doing business in California. Insurers may be subject to as many as three insurance taxes in California:

  • Tax on gross premiums – A tax on gross premiums or business income.  The basis for the tax is a percentage of gross premiums, less returned premiums, received by the insurer on business done in California. (RTC 12221.) Gross premiums do not include premiums received for ocean marine insurance. For insurers transacting title insurance, the basis of the tax is based on California business income. (RTC 12231.)
  1. The insurance gross premiums tax imposed by the California Constitution, Article XIII, section 28, is an annual tax imposed on each insurer doing business in California. The California Department of Tax and Fee Administration (CDTFA) assesses the tax on behalf of the Board of Equalization (BOE) through an interagency agreement. The tax imposed on insurers by Section 28 is jointly administered by the CDTFA, BOE, CDI and the State Controller's Office (SCO), under RTC Part 7 of Division 2.
  • Retaliatory tax – A retaliatory tax is imposed on an out-of-state insurer if the insurance company is domiciled in another state which imposes higher taxes and fees on a California-domiciled insurer for the same business. When the home state does this, a retaliatory tax in the amount of the difference is assessed against the out-of-state insurer. (Cal.Const., Art. XIII, section 28, subd. (f)(3); Ins. Code 685).
  • Ocean marine tax – An ocean marine tax is applicable to insurers transacting the business of ocean marine insurance in California. The basis of the tax is measured by a portion of the underwriting profits. (RTC 12103.)

Application of Tax on Surplus Line Brokers

Surplus Line Brokers, are licensed brokers that sell policies for non-admitted (non-licensed) insurance companies. Non-admitted insurance companies are insurers that are not licensed or admitted to conduct insurance business in California. Surplus line brokers also pay an insurance tax of three percent (3.00%).

For more information about taxes on insurers, please contact the CDI at 1-800-927-4357 or visit www.insurance.ca.gov/.

There is no online registration process for Insurers and Surplus Line Brokers with the CDTFA. The California Department of Insurance (CDI) notifies the CDTFA of new registrations.

Insurers are required to register with and receive a Certificate of Authority from the CDI to transact insurance business in California.

Surplus Line Brokers should contact the CDI directly for specific registration and licensing requirements.

To register, please visit the CDI website or contact them at 1-800-927-4357 for information on registration and licensing requirements. Tax forms and payment instructions are available on the CDI website.

The rate of tax on insurance varies by the type of insurance. For detailed information regarding rates, contact the California Department of Insurance at 1-800-927-4357 or visit www.insurance.ca.gov/.

All insurance tax returns are filed and paid to the California Department of Insurance (CDI). The CDI then forwards the payments to the SCO for posting to insurers' accounts.

  • All insurers – For all insurers, except ocean marine insurers and surplus line brokers, the annual return and payment are due April 1 of the following calendar year. For example, the Calendar Year 2019 return is due on or before April 1, 2020. If applicable, the schedule for retaliatory tax should be filed with the annual return.
  • Retaliatory tax – The schedule for retaliatory tax should be filed with the annual return for all insurers as above.
  • Ocean marine insurers – The return and payment for taxes on ocean marine insurance are due June 15 of the following calendar year. For example, the Calendar Year 2019 return is due on or before June 15, 2020.
  • Surplus line brokers – The return and payment for surplus line brokers are due March 1 of the following calendar year. For example, the Calendar Year 2019 return is due on or before March 1, 2020.

The CDI's Electronic Fund Transfer Program Information Guide provides EFT registration information. For assistance or more information, you may also call 1-916- 492-3288, send an email to eft@insurance.ca.gov, or write to the following address:

California Department of Insurance
Accounting Services Bureau
Attn: Tax Accounting/EFT
300 Capitol Mall, Suite 14000
Sacramento, CA 95814

For more information on return or payment due dates, please contact the CDI at 1-800-927-4357 or visit www.insurance.ca.gov.

CDTFA Assessment Payments

The CDI sends Proposed Deficiency Assessments (PDA) to CDTFA, along with copies of tax returns. Based on these returns, CDTFA team members prepare schedules of tax by insurer for distribution to the CDI and SCO. These schedules are considered to be the initial assessment of tax, as required by RTC § 12412.

Payments for billings issued by the CDTFA should go directly to the SCO.

Payment instructions are provided on the billing. If you are making payment by check, please make your check payable to:

State Controller's Office
Departmental Accounting Office
Insurance Tax Program
P.O. Box 942850
Sacramento, CA 94250-0001

Visit the sites below for more information about other state, federal, and local taxing and licensing information:

  • The Governor's Office of Business and Economic Development (GO-Biz) offers extensive information on state, local, and federal permit requirements. For a listing of their assistance centers, visit www.business.ca.gov/.
  • CalGold at www.calgold.ca.gov for help with permit and licensing requirements for other state, federal, and local authorities (for example, you may need to be registered with the Franchise Tax Board or the Employment Development Department).
  • California's Tax Service Center at www.taxes.ca.gov for additional tax information.

You may also want to consult with a tax professional for assistance on other agency requirements.

For detailed information regarding exemptions, please contact the California Department of Insurance at 1-800-927-4357 or visit www.insurance.ca.gov.

The tax imposed on insurers (including ocean marine insurers) is in lieu of all other taxes and licenses, state, county, and municipal, upon those insurers and their property, except those as stated in RTC 12204 (or RTC 12102).

You may file an appeal of an insurance tax deficiency assessment (billing) using CDTFA-416, Petition for Redetermination, stating the specific grounds upon which the appeal is founded. Petitions for Redetermination must be filed in writing within 30 days from the date on the assessment, and specify the period for which you are making the appeal. Additional information about appeals can be found in CDTFA publication 17, Appeals Procedures.

Mail your petition to:

California Department of Tax and Fee Administration
Appeals and Data Analysis Branch (MIC: 33)
PO Box 942879
Sacramento, CA 94279-0033

Or, send your petition by email.

A copy of the appeal must also be mailed to:

California Department of Insurance
Premium Tax Audit Unit
300 South Spring Street, 13th Floor
Los Angeles, CA 90013-1230

When to File a Claim for Refund

Be sure to file your claim for refund by the applicable deadline. If you do not file on time, we cannot consider your claim, even if you overpaid the tax. You must file a claim for refund by whichever of the following dates that occurs last:

  • For returns – Four years after April 1st of the year following the year for which the overpayment was made. (This date is also valid for ocean marine insurers and surplus line brokers, even though they have different annual return due dates of June 15 and March 1 respectively.)
  • Examples:

    • Insurers (home, property & casualty, title, life): For calendar year 2019, a tax return must be filed by April 1, 2020 and a refund must be filed by April 1, 2024.
    • Surplus line Broker: For calendar year 2019, a tax return must be filed by March 1, 2020 and a refund must be filed by April 1, 2024.
    • Ocean Marine: For calendar year 2019, a tax return must be filed by June 15, 2020 and a refund must be filed by April 1, 2024.
  • Six months from the date you overpaid the tax.
  • Six months from the date a determination (billing) became final.

How to File a Claim for Refund

If you have overpaid the tax on insurers, you may file a claim for refund by using form CDTFA-101, Claim for Refund or Credit, or by filing an amended return(s), stating the specific reason(s) for the overpayment. Claims for refund must be in writing, be signed by you and should specify the period and amount for which you are making the claim. Additional information about claiming a refund can be found on the CDTFA's Special Taxes Refunds webpage.

Email the claim form.

Or mail claims to:

California Department of Tax and Fee Administration
Appeals and Data Analysis Branch (MIC: 33)
P.O. Box 942879
Sacramento, CA 94279-0033

A copy of your claim for refund and amended return must also be sent to:

California Department of Insurance
Premium Tax Audit Unit
300 South Spring Street, 13th Floor
Los Angeles, CA 90013-1230

Attn: Amended Tax Return


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  • Get It In Writing! – Tax and fee laws can be complex, and you are encouraged to put your tax questions in writing. You may send your request to: Special Taxes and Fees, MIC: 31, California Department of Tax and Fee Administration, P.O. Box 942879, Sacramento, CA 94279-0031.
  • Taxpayers' Rights Advocate (TRA) – The TRA Office helps taxpayers when they are unable to resolve a matter through normal channels, such as speaking to a supervisor, or when there are apparent rights violations.
  • GO-Biz – The Governor's Office of Business and Economic Development offers extensive information on state, local, and federal permit requirements. For a listing of their assistance centers, visit their website.
  • CalGold – Provides help with permit and licensing requirements on the other state, federal, and local authorities. For example, you may need to register with the Franchise Tax Board or the Employment Development Department. You may also want to consult with a tax professional or your local city and county authorities for assistance regarding other agencies' requirements or restrictions.
  • California's Tax Service Center – A one-stop tax help and resource website that guides taxpayers to forms and services they need.