ident therein and
receiving at its home office the renewal premiums.[574] Distinguishable
therefrom is the following tax which was construed as having been
levied, not upon annual premiums nor upon the privilege merely of doing
business during the period that the company actually was within the
State, but upon the privilege of entering and engaging in business, the
percentage "on the annual premiums _to be paid throughout the life of
the policies issued_." By reason of this difference a State may continue
to collect such tax even after the company's withdrawal from the
State.[575]

A State which taxes the insuring of property within its limits may
lawfully extend its tax to a foreign insurance company which contracts
with an automobile sales corporation in a third State to insure its
customers against loss of cars purchased through it, so far as the cars
go into possession of purchasers within the taxing State.[576] On the
other hand, a foreign corporation admitted to do a local business, which
insures its property with insurers in other States who are not
authorized to do business in the taxing State, cannot constitutionally
be subjected to a 5% tax on the amount of premiums paid for such
coverage.[577] Likewise a Connecticut life insurance corporation,
licensed to do business in California, which negotiated reinsurance
contracts in Connecticut, received payment of premiums thereon in
Connecticut, and was there liable for payment of losses claimed
thereunder, cannot be subjected by California to a privilege tax
measured by gross premiums derived from such contracts, notwithstanding
that the contracts reinsured other insurers authorized to do business in
California and protected policies effected in California on the lives of
residents therein. The tax cannot be sustained whether as laid on
property, business done, or transactions carried on, within California,
or as a tax on a privilege granted by that State.[578]

When policy loans to residents are made by a local agent of a foreign
insurance company, in the servicing of which notes are signed, security
taken, interest collected, and debts are paid within the State, such
credits are taxable to the company, notwithstanding that the promissory
notes evidencing such credits are kept at the home office of the
insurer.[579] But when a resident policyholder's loan is merely charged
against the reserve value of his policy, under an arrangement for
extinguishing the debt an