103 A.3d 260

#### UNITED PARCEL SERVICE GENERAL SERVICES CO.; UNITED PARCEL SERVICE CO.; UPS TELECOMMUNICATIONS, INC.; UPS WORLDWIDE FORWARDING INC.; UPS WORLDWIDE FORWARDING INC., AS SUCCESSOR IN INTEREST TO UPS AIR FORWARDING, INC., PLAINTIFFS-RESPONDENTS AND CROSS-APPELLANTS, v. DIRECTOR, DIVISION OF TAXATION, DEFENDANT-APPELLANT AND CROSS-RESPONDENT.

Argued September 23, 2014

Decided December 4, 2014.

*91*Marlene G. Brown,*Senior Deputy Attorney General, argued the cause for appellant and cross-respondent *(John J. Hoffman,*Acting Attorney General; *Melissa H. Raksa,*Assistant Attorney General, of counsel).

*Mitchell A. Newmark*argued the cause for respondents and cross-appellants *(Morrison & Foerster,*attorneys).

*92PER CURIAM.

This appeal arises from the New Jersey Division of Taxation’s assessment of late payment and tax amnesty penalties under the New Jersey Corporation Business Tax Act, *N.J.S.A.*54:49-6(a), *N.J.S.A.*54:53-17, -18, against plaintiffs, five subsidiaries of United Parcel Service of America (UPS).

Following a trial, the Tax Court determined that the Division reasonably had concluded that two categories of routine, inter-company transfers of funds, conducted by plaintiffs as part of the cash management system used by UPS and its affiliates, constituted loans as to which interest should be imputed for purposes of the Corporate Business Tax Act. *United Parcel Serv. Gen. Servs. Co. v. Dir., Div. of Taxation,*25 *N.J.Tax*1, 24 (2009). However, the Tax Court concluded that the Division improperly had denied plaintiffs’ application for a waiver of late payment penalties under *N.J.S.A.*54:49-ll(a) and *N.J.AC.*18:2-2.7, and that the Division incorrectly had assessed a five percent amnesty penalty on plaintiffs pursuant to *N.J.S.A.*54:53-17 and -18. *Id.*at 50, 54. The Appellate Division affirmed the Tax Court’s determination with respect to the late payment and tax amnesty penalties, adopting Judge Kuskin’s comprehensive findings of fact and concurring with his detailed analysis of the relevant provisions of the Corporate Business Tax Act. *United Parcel Serv. Gen. Servs. Co. v. Dir., Div. of Taxation,*430 *N.J. Super.*1, 17, 61 A.3d 160 (App.Div.2013). We granted certification. 216 *N.J. 5, 75*A.3d 1160 (2013).

We affirm, substantially for the reasons stated by the Appellate Division, and add the following brief comments.

First, notwithstanding the outcome in this matter, we underscore the deference afforded to the determinations of the Division, whose expertise in the complex and specialized subject of tax law “is entitled to great respect by the courts.” *Metromedia, Inc. v. Dir., Div. of Taxation,*97 *N.J.*313, 327, 478 A.2d 742 (1984); *see also Koch v. Dir., Div. of Taxation,*157 *N.J.*1, 8, 722 A.2d 918 (1999); *Yilmaz, Inc. v. Dir., Div. of Taxation,*390 *93*N.J.Super.*435, 440, 915 A.2d 1069 (App.Div.), *certif. denied,*192 *N.J.*69, 926 A.2d 854 (2007). The Legislature has conferred upon the Division substantial discretion to determine whether to “remit or waive the payment of the whole or any part of any penalty” imposed upon a taxpayer for a late filing. *N.J.S.A.*54:49-ll(a); *see also N.J.A.C.*18:2-2.7.

However, we concur with the conclusion of the Tax Court and the Appellate Division that, in the factual setting of this case, the Division improperly exercised its discretion. We note that under *N.J.AC.*18:2-2.7(c)(4), the pendency of an “action or proceeding for judicial determination may constitute reasonable cause, until the time in which the taxpayer has exhausted its administrative or judicial remedies,” provided that “[t]he action or proceeding involves a question or issue affecting whether or not the ... entity is required to ... pay tax; [t]he action or proceeding is not based on a position which is frivolous; and [t]he facts and circumstances for such taxable period or periods are identical or virtually identical to those of the taxable period or periods covered by the action or proceeding.” *N.J.A.C.*18:2-2.7(c)(4). A taxpayer’s showing of “|a]n honest misunderstanding of fact or law that is reasonable in light of the experience, knowledge and education of the taxpayer” supports a finding of “reasonable cause.” *N.J.AC.*18:2-2.7(d)(l)(i). Such a finding is warranted here.

As the Tax Court observed, with no directly pertinent legal authority then in existence, “genuine questions of fact and law existed concerning the propriety of the Director’s imputation of interest” with respect to plaintiffs’ disputed transfers conducted under the UPS cash management system. *United Parcel Serv. Gen. Servs. Co., supra,*25 *N.J.Tax*at 50. Indeed, citing *N.J.AC.*18:2-2.7(b)’s standard for the grant of an abatement, the Division acknowledged in writing that one of the plaintiffs had demonstrated “reasonable cause in this matter.” We therefore agree with the Appellate Division and affirm the Tax Court’s finding that the Division did not exercise properly the discretion that the Legisla*94ture afforded to it in *N.J.S.A.*54:49-ll(a) when it declined to waive late payment penalties imposed on plaintiffs.

Second, we concur with the Appellate Division that neither of the tax amnesty statutes that govern this ease clearly indicates whether the Legislature intended to authorize the imposition of a tax amnesty penalty against a taxpayer in plaintiffs’ circumstances. *United Parcel Serv. Gen. Servs. Co., supra,*430 *N.J.Super.*at 15-16, 61 A.3d 160. The penalty provisions of both tax amnesty statutes require the Division to impose a penalty on “a taxpayer who has failed to pay any State tax” before the day upon which it is due. N.J.S.A 54:53-17(a), -18(a). Neither statute expressly indicates whether a taxpayer who timely files tax returns, pays all reported tax liabilities and is found to be liable for additional taxes following an audit, has “failed to pay” New Jersey taxes, and therefore should be assessed a penalty. *Ibid.*

Applying traditional principles of statutory construction, “we look to the legislative history to aid in determining the legislative intent of’ a statute whose plain language is subject to more than one reasonable interpretation. *Oberhand v. Dir., Div. of Taxation,*193 *N.J.*558, 568, 940 A.2d 1202 (2008). We rely upon the State Treasurer’s testimony in the hearings that led to the enactment of the 1996 amnesty statute, *N.J.S.A.*54:53-17, testimony incorporated into statements of the Legislative committee that reviewed the legislation: “the bill’s penalties will not be applied to deficiencies assessed pursuant to a question of law or fact uncovered through routine audits of taxpayers otherwise in compliance with filing and payment requirements of State taxes.” *Assembly Appropriations Comm. Statement to Assembly Comm. Substitute for Assembly Bill No. U20*(Feb. 5,1996); *see also Senate Budget & Appropriations Comm. Statement to Senate Comm. Substitute for Senate Bill No. 675*(Feb. 15,1996).1

*95Guided by the legislative history, we concur with the Tax Court and the Appellate Division that *N.J.S.A.*54:53-17 and -18 were not intended to authorize or mandate a tax amnesty penalty in the setting of this case. As the parties agree, and as the Tax Court found, plaintiffs timely filed their corporate tax returns and paid the taxes reported to be due in those returns. *United Parcel Serv. Gen. Servs. Co., supra, 25 N.J.Tax*at 53. Further, as the parties agree, and as the Tax Court found, the Division discovered the bases for its assessments against plaintiffs during an audit of plaintiffs’ tax returns. *Ibid.*Accordingly, we concur with the Tax Court’s conclusion, affirmed by the Appellate Division, that the Division improperly assessed tax amnesty penalties on plaintiffs pursuant to *N.J.S.A.*54:53-17 and -18.

The judgment of the Appellate Division is affirmed.

*For*affirmance—Chief Justice RABNER and Justices LaVECCHIA, ALBIN, PATTERSON, FERNANDEZ-VINA and SOLOMON—6.

*Not*Participating—Judge CUFF (temporarily assigned).

1

 We acknowledge that the State Treasurer did not provide analogous testimony during the legislative hearings that led to the 2002 amnesty statute, *N.J.S.A.*54:53-18, but note that the language of the penalty provisions of *NJ.S.A.*54:53-*9517 and *N.J.S.A.*54:53-18 is identical, and that no contrary statement was made during the hearings that led to the 2002 tax amnesty statute. *Assembly Appropriations Comm. Statement to Assembly Comm, for Assembly Bill No. 2001*(Mar. 4, 2002) (substituted by SI6/404); *Senate Budget and Appropriations Comm. Statement to Senate Comm. Substitute for Senate Bill Nos. 16 and 404*(Feb. 21, 2002).