NO. 90-393 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1991 

NORFOLK HOLDINGS, INC . , 

Petitioner and Appellant 

v. 

JUN 13 199% 

THE MONTANA DEPARTMENT OF REVENUE, CLERK Cd OF SUPREME Smitlr COURT 

STATE OF MONTANA 

Respondent and Respondent. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis and Clark, 

The Honorable Dorothy McCarter, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

James P. Sites argued, Louis R. Moore, Crowley, 

Haughey, Hanson, Toole & Dietrich, Billings, Montana 

For Respondent: 

Geralyn ~riscoll argued, Department of Revenue, 

Helena, Montana 

Filed: 

submitted: May 7, 1991 

Decided: June 13, 1991 
Justice ~illiam E. Hunt, Sr., delivered the opinion of the Court. 

Norfolk Holdings, Inc. , (Taxpayer) appeals from an order of 

the First Judicial District Court, Lewis and Clark County, holding 

that Taxpayer's claim for a refund was barred by the statute of 

limitations. We affirm. 

The sole issue raised on appeal is whether an automatic 

extension of time for filing corporate license tax returns may be 

included in computing the five-year limitations period in 

5 15-31-509(2), MCA. 

Taxpayer reported its 1982 corporate license tax on a calendar 

year basis. On May 13, 1983, it filed a tentative 1982 tax return 

form and paid $241,012 in estimated tax. At the same time, 

Taxpayer applied for an automatic extension of time until 

October 15, 1983, to file its return. 

On May 14, 1984, Taxpayer filed its finalized return for 1982, 

which showed a tax liability of $197,267. Thereafter, the State 

of Montana, Department of Revenue (Department), refunded 

$43,745--the difference between the estimated tax payment and the 

finalized amount due. 

On June 20, 1988, the Department received from Taxpayer 

amended returns and claims for refunds for tax years 1982 through 

1986. The Department issued refunds for all years except 1982. 

It refused the refund claimed for 1982, contending that the statute 

of limitations for a refund of that year's taxes had expired. 
Taxpayer appealed to the State Tax Appeal Board. With the 

Department's consent, the case was moved to District Court for 

interlocutory adjudication, where the matter was submitted on 

agreed facts. The District Court ruled in favor of the Department, 

concluding that the five-year period of limitations in 

5 15-31-509(2), MCA, does not include consideration of any 

extensions of time for filing returns. Taxpayer appeals. 

Section 15-31-101(3), MCA, mandates that corporate license 

taxes are Itdue and payable on the 15th day of the 5th month 

following the close of the taxable year of the corporation . . . . 11 

Section 15-31-111(2), MCA, establishes the due date for filing 

corporate license tax returns. The statute reads in its entirety: 

If the corporation is reportins on a calendar year basis, 

the return shall be filed with the department on or 

before May 15 followins the close of the calendar year, 

and if reporting on a fiscal year basis, the return shall 

be filed with the department on or before the 15th day 

of the 5th month following the close of its fiscal year. 

Upon application, a corporation shall be allowed an 

automatic extension of time for filins its return of 1 

to 6 months followins the date prescribed for filins of 

its tax return. The application is to be made on such 

forms as the department shall prescribe. (Emphasis 

added. ) 

Section 15-31-111(2), MCA. 

Thus, tax returns of corporations filing on a calendar year 

basis are due on May 15 of the following year. However, a 

corporate taxpayer may apply for an automatic extension of up to 

six months for filing the return. Section 15-31-111(2), MCA. If 

the Department deems that good cause exists for granting more time 
for filing, it may grant an extension above and beyond that 

received with the automatic extension. Section 15-31-111(3), MCA. 

A taxpayer has five years in which to claim a refund of 

corporate license taxes. Section 15-31-509(2), MCA. The statute 

of limitations provides: 

No refund or credit shall be allowed or paid with respect 

to the year for which a return is filed after 5 years 

from the last day prescribed for filins the return or 

after 1 year from the date of the overpayment, whichever 

period expires the later, unless before the expiration 

of such period the taxpayer files a claim therefor or the 

department of revenue has determined the existence of the 

overpayment and has approved the refund or credit 

thereof. If the taxpayer has agreed in writing under the 

provisions of subsection (1) of this section to extend 

the time within which the department may propose an 

additional assessment, the period within which a claim 

for refund or credit may be filed or a credit or refund 

allowed in the event no claim is filed shall 

automatically be so extended. (Emphasis added.) 

Section 15-31-509 (2), MCA. 

Taxpayer argues that the "last day prescribed for filing the 

returnw in this statute includes the automatic extension of time 

provided for in § 15-31-111(2), MCA. The Department, on the other 

hand, argues that "the last day prescribed for filing the returnvv 

does not include any extensions of time received by the taxpayer. 

The Department maintains that, for a corporation filing on a 

calendar year basis, the Ivlast day prescribed for filingvt is May 15 

following the close of the calendar year. We agree with the 

Department. 

A statute must be construed according to the plain meaning of 

the language therein. State ex rel. Woodahl v. District Court, 162 
Mont. 283, 292, 511 P.2d 318, 323 (1973). In this case, the 

operative word to be construed is "prescribed.I1 Black's Law 

Dictionary 1345 (6th ed. 1990) defines "prescriben as follows: 

To lay down authoritatively as a guide, direction, or 

rule; to impose as a peremptory order; to dictate; to 

point, to direct; to give as a guide, direction, or rule 

of action; to give law. 

Following this definition, the plain meaning of I1prescriben 

is to l1lay down authoritatively. 'I In 3 15-31-111 (2), MCA, the 

legislature statutorily established a due date for filing a 

corporate license tax return, i.e., May 15 following the close of 

the taxable year for corporations filing on a calendar year basis. 

This statutorily established day for filing the return is the day 

the legislature "laid down authoritatively1' or "prescribed1' for 

filing the return. 

Although 3 15-31-111(2), MCA, allows the taxpayer to 

automatically extend the period of time for filing for up to six 

months, the extension applied for by the taxpayer is not included 

in determining when the limitations period begins to run. If the 

statute did not begin to run until the exhaustion of the automatic 

extension, the day prescribed for filing would be a day established 

by the taxpayer, not the legislature. The day would no longer be 

"laid down authoritatively1' but would depend upon the whim of the 

taxpayer. tlPrescribew would be stripped of all meaning. The 

automatic extension simply gives the taxpayer additional time to 
prepare the return. It does not change the day prescribed by the 

legislature for filing the return. 

In 1972, the Department promulgated 5 42.23.601, ARM, which 

interprets the limitations period for claims for refunds of 

corporate license taxes. The regulation provides as follows: 

No refund or credit may be allowed or paid with respect 

to the year for which a return is filed, unless, within 

5 years from the last day prescribed for filing the 

return or after 1 year from the date of the overpayment 

(whichever period expires later) the taxpayer files a 

claim for refund thereof or the department has determined 

the existence of the overpayment and has approved 

refunding or crediting thereof. The 5-year period is 

determined without resard to any extension which may have 

been sranted. (Emphasis added.) 

Section 42.23.601, ARM. 

The regulation reflects the Department's conviction that any 

extensions of time received for filing the return are excluded from 

the computation of the running of the statute of limitations. The 

adoption of the regulation, which is not in conflict with the 

statute and is reasonably necessary to effectuate the purpose of 

the statute, is a valid exercise of the Department's rule making 

authority. Section 2-4-305(6), MCA. This Court shows great 

deference to an interpretation given a statute by the agency 

charged with its administration. DtEwart v. Neibauer, 228 Mont. 

335, 340, 742 P.2d 1015, 1018 (1987) (quoting Department of Revenue 

v. Puget Sound Power & Light Co., 179 Mont. 255, 262, 587 P.2d 
In conclusion, the statute of limitations for claiming refunds 

of corporate license taxes begins to run on the date statutorily 

established by the legislature. This date does not include any 

automatic extension of time applied for and received by the 

taxpayer under 5 15-31-111(2), MCA. 

Taxpayer in this case filed on a calendar year basis. 

Therefore, the limitations period for its 1982 taxes began to run 

on May 15, 1983, and expired five years later on May 15, 1988. 

Because Taxpayer did not file for a refund until June 20, 1988, its 

claim was time barred. 

Affirmed. 

We Concur: ./ 

/' 

Justice 
Justice Terry N. ~rieweiler dissenting. 

I respectfully dissent from the opinion of the majority. 

Although the majority opinion discussed traditional rules of 

statutory construction, I believe it overlooks the most important 

rule of construction which is applicable in this case. That rule 

is as follows: 

In interpreting tax statutes it should always be kept in 

mind that they are to be strictly construed against the 

taxing authorities, and in favor of the taxpayer. 

Butte Country Club v. Dept. of Revenue, 186 Mont. 424, 430, 608 

P.2d 111, 115 (1980). 

In this case, the taxpayer's entitlement to recover a refund 

hinges on our interpretation of the phrase "the last day 

prescribed,I1 as used in 5 15-31-509(2), MCA. As the majority has 

correctly stated, no refund can be paid unless a claim for that 

refund has been filed within five years from the last day 

prescribed for filing the return. 

The last day prescribed for filing the return is set forth in 

5 15-31-111(2), MCA, which provides that the return is due on 

May 15 of the next calendar year unless an application for an 

automatic extension is filed. In that event, the tax return is due 

on the date to which the extension is granted. 

"Time prescribed for filing" is nowhere defined in the Title 

on taxation. However, I believe it is reasonable to interpret the 

time prescribed by § 15-31-111(2), MCA, to be May 15, plus any 

additional period granted pursuant to the taxpayer's application 

8 
for an automatic extension. This conclusion would be consistent 

with the decision of the Maryland Court of Appeals in Compt. of 

Treas., Inc. Tax Div. v. Diebold, Inc., 369 A.2d 77 (Md. 1977) . 

Although the language being interpreted in that case was not 

identical to the language in question here, the facts are similar 

and it provides the only precedent cited by either party which 

appears to be on point on the issue we have been asked to decide. 

In the Diebold decision, the Maryland taxpayer's income tax returns 

for 1966 and 1967 were due on March 15 following each taxable year. 

However, for each tax return that taxpayer was granted an extension 

to July 15. He claimed a right to a refund for the 1966 taxable 

year on July 14, 1970, and for the 1967 return on May 7, 1971. The 

Maryland Comptroller found that the refunds claimed for the years 

1966 and 1967 were barred by a statute of limitations which 

required that refund claims be filed within three years from the 

date the refund was "due to be filed. I' The Maryland Tax Court 

concluded, as this Court has, that the statute of limitations ran 

from the date when the returns were originally due and not from the 

date to which extensions were granted. However, the Maryland Court 

of Appeals disagreed and stated as follows: 

Diebold contends, and we think correctly, that the Tax 

Court erred when it concluded that Code Art. 81, 8 3 10 (b) 

mandated that the three-year period of limitations ran 

from the date when the 1966 and 1967 returns were 

originally due to be filed (15 March 1967 and 15 March 

1968) and not from the date to which extensions were 

granted under Art. 81, 88 305 and 306. 

As we construe the language of 9 310 (b): 
"Any claim for a refund made under and pursuant 

hereto . . . shall be filed within three years from 

the date the return was due to be filed . . .. 11 

we think that it is clearly contemplated that limitations 

will run from the date of any extension. Obviously, that 

part of 5 310(c) which requires the State to pay interest 

on any refunds ll. . . accounting from the date the return . . . was due to be filed . . .I1 would not be interpreted 

as requiring the payment of interest from the original 

due date, rather than from the date to which an extension 

has been granted. 

Diebold, 369 A.2d at 81. 

In this case, there are two plausible explanations for what 

the legislature meant by "last day prescribed for filing." 

However, since the legislature did not bother to explain what was 

meant, I believe, based upon the authority previously cited, that 

explanation which is most favorable to the taxpayer should be 

adopted. 

For these reasons, I dissent from the majority opinion and 

would reverse the judgment of the District Court.