What Does State Taxation Of Insurance Mean?
Insurance companies in almost every single state are taxed by their state government. State governments tax insurance companies primarily through a tax called a "premium tax." This is a tax imposed on an insurance company based on the amount of premiums that it collects in a year.
Insuranceopedia Explains State Taxation Of Insurance
Oregon is the only state that does not tax insurance companies through a premium tax. Washington DC also doesn't participate in the practice. States also commonly tax insurance companies through a "retaliatory tax."
Taxes collected from insurance companies often makes up a significant portion of a state's taxation revenue, totally as much as hundreds of millions or even billions in a single tax period.