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Retaliation Laws

Definition of "Retaliation laws"

Legislation by a state that taxes out-of-state insurance companies operating in its jurisdiction in the same way that the state's own insurance companies are taxed in the second state. For example, state #1 charges a tax of 4% on its domiciled insurers. But if these insured are charged a higher tax when operating in state #2, then state #1 will charge the higher tax to insurers of state #2 who wish to do business in state #1.

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