California Revenue And Taxation Code Section 13210

(a) For gross premiums paid or to be paid on insurance contracts that take effect or are renewed on or after January 1, 1994, every person who effects insurance governed by Chapter 6 (commencing with Section 1760) of Part 2 of Division 1 of the Insurance Code shall pay a gross premium tax of 3 percent for the use of the state, less 3 percent of returned premiums that were subject to the tax received by reason of cancellation or reduction of premium. (1) This section shall not apply to any of the following: (A) Insurance coverage for which a tax on the gross premium is due or has been paid pursuant to Section 1775.5 of the Insurance Code. (B) Gross premiums paid and returned premiums received by that person upon business governed by the provisions of Section 1760.5 of the Insurance Code. (C) Insurance coverage for which a tax on the gross premium is due or has been paid pursuant to Section 132 of the Insurance Code. (2) If during any calendar quarter 3 percent of the returned premiums received that were subject to the tax imposed by this part exceed 3 percent of the gross premiums paid or to be paid by that person on contracts that took effect or were renewed in that calendar quarter, then that person may either carry forward the excess to a succeeding calendar quarter and apply it as a credit against the 3 percent of gross premiums paid or to be paid by that person in the succeeding calendar quarter, or the person may elect to receive, and be paid a refund equal to the amount of taxes paid by the person on the excess of returned premiums received over gross premiums paid or to be paid. (b) For purposes of determining the tax, the total premium paid or to be paid for all nonadmitted insurance placed in a single transaction with one underwriter or group of underwriters, whether in one or more policies, in that calendar quarter during which the taxable insurance contract or contracts took effect or were renewed, shall be allocated to this state in the proportion that the total premium on the insured properties or operations in this state, as computed on the exposure in this state on the basis of any single standard rating method in use in all states or countries where the insurance applies, bears to the total premium so computed in all states or countries in which that nonadmitted insurance may apply or, with prior approval of the Franchise Tax Board, on any other reasonable basis as determined by the Franchise Tax Board in its sole discretion. (c) Subdivision (b) shall not apply to interstate motor transit operations conducted between this and other states. With respect to those operations, the tax shall be payable on the entire premium charged on all nonadmitted insurance, less any of the following: (1) The portion of the premium that is determined to have been charged for operations in other states that have taxed the premium on operations in states of an insured maintaining its headquarters office in this state. (2) The premium for any operations outside of this state of an insured who maintains a headquarters operating office outside of this state and a branch office in this state.