Net income taxation in addition to or in lieu of premium taxation has emerged as a consideration in many states. The implications of using the Federally designed net income or other bases are complex regarding retaliation, interand intra-industry sharing, apportionment and administration. The principle implication of a. net income tax at the state level comparab e to the tax rate in non-insurance corporations is equity: the premium tax is a heavier burden. No justification appears for such differential burdens. No chronicle of increasing state government expenditure, increasing demand for quality and quantity of state services, the short fall of tax receipts and the impact of inflation rates is necessary to establish the importance to legislatures of a search for new and additional revenues and the equitable apportionment of taxes. Despite differences in economic conditions, constitution based tax limitations and the interplay of political forces, new revenues tend to be generated in nearly the same proportion from personal income, business income and transactions taxes. Substantial shifts in apportionment are infrequent, although they have occurred in California. These shifts tend to make the bases of taxation within sectors critical especially to those in them. Differing bases of taxation suggest differing abilities in tax shifting, tax incidence and tax impact with their attendant competitive effects.