Insurance Tax Guide

• 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/.

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.

For detailed information regarding rates, contact the California Department of Insurance at 1-800-927-4357 or visit the CDI.

• 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

• 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 GO-Biz.
• CalGold 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 Tax Service Center for additional tax information.

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

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).

Note: If you do not have a username and password, click on Sign Up Now under the Create a Username heading from the online services homepage.

A petition for redetermination must be submitted within 30 days from the date the Insurance Tax Deficiency Assessment was mailed to you to be considered timely.

Additional Appeal Filing Options – You may also file an appeal using form CDTFA-416, Petition for Redetermination, stating the specific grounds upon which the appeal is founded. Your appeal may be submitted to us and CDI by email or at the address listed below.

You may email your appeal to CDTFA Insurance Team or mail it to:

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

A copy of the appeal must also be mailed to:

California Department of Insurance
Premium Tax Audit Unit
300 South Spring Street, 9th Floor
Los Angeles, CA 90013-1230

Additional information about appeals can be found in publication 17, Appeals Procedures.

If you do not have a username and password, click on Sign Up Now under the Create Username heading from the online services homepage.

If your account is not registered with CDTFA, you may submit a claim by clicking on Claim a Refund or Request Relief for Insurance on our online services homepage under the Limited Access Functions.

Note: If your account is registered with the CDTFA, you will be prompted to log in.

Additional Claim for Refund Filing Options – You may also file your claim for refund by filing either:

• A form CDTFA-101, Claim for Refund or Credit, or
• An amended return(s), stating the specific reason(s) for the overpayment.

Claims for refund must be in writing, signed by the owner or an authorized representative, state the reason for the overpayment, specify the period for the overpayment, and the amount of refund requested. Additional refund details can be found on our Filing Claims for Refund – Special Taxes and Fees webpage.

You may email the claim form to CDTFA Insurance Team or mail it 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 or amended return must also be sent to:

California Department of Insurance
Premium Tax Audit Unit
300 South Spring Street, 9th Floor
Los Angeles, CA 90013-1230

Attn: Supervisor

Deadline 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. You must file a claim for refund by whichever of the following dates that occurs last:

• Four years after April 1st of the year following the year for which the overpayment was made (this 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 claim for 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 claim for 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 claim for refund must be filed by April 1, 2024.
• Six months from the date the deficiency assessment becomes final, or
• Six months from the payment date.

If you have questions about your deadline to file a claim for refund claim, contact our Customer Service Center at 1-800-400-7115 (CRS: 711).