(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 California home state insured as defined by subdivision (f) of Section 1760.1 of the Insurance Code, 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 charged 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. (1) This section shall not apply to any of the following:

   1. (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.
   2. (B) Gross premiums paid and returned premiums received by that California home state insured as defined by subdivision (f) of Section 1760.1 of the Insurance Code, upon business governed by the provisions of Section 1760.5 of the Insurance Code.
   3. (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. (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.

(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. (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. (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.