Metropolitan Life Insurance v. Ward

This case presents the question whether Alabama’s domestic preference tax statute, Ala. Code §§27-4-4 and 27-4-5 (1975), that taxes out-of-state insurance companies at a higher rate than domestic insurance companies, violates the Equal Protection Clause.

I

Since 1955,1 the State of Alabama has granted a preference to its domestic insurance companies by imposing a substantially lower gross premiums tax rate on them than on out-of-state (foreign) companies.2 Under the current statutory provisions, foreign life insurance companies pay a tax on their gross premiums received from business conducted…