Opinion ID: 1198900
Heading Depth: 1
Heading Rank: 4

Heading: the commission met the fourth prong of the test.

Text: If an agency with authority to administer a statutory area of law has made a reasonable construction of a statute on a question without a precise statutory answer then, under the fourth prong of the test, a court must ask whether any of the rationales underlying the rule of deference are present. If the underlying rationales are absent then their absence may present cogent reasons justifying the court in adopting a statutory construction which differs from that of the agency. When some of the rationales underlying the rule exist but other rationales are absent, a balancing is necessary because all of the supporting rationales may not be weighted equally. Therefore, the absence of one rationale in the presence of others could, in an appropriate case, still present a cogent reason for departing from the agency's statutory construction.... If one or more of the rationales underlying the rule are present, and no cogent reason exists for denying the agency some deference, the court should afford considerable weight to the agency's statutory interpretation. J.R. Simplot Co., 120 Idaho at 862, 820 P.2d at 1219. The five rationales underlying the rule of deference are: (1) the rationale requiring that a practical interpretation of the statute exists, (2) the rationale requiring the presumption of legislative acquiescence, (3) the rationale requiring agency expertise, (4) the rationale of repose, and (5) the rationale requiring contemporaneous agency interpretation. Id. at 858-59, 820 P.2d at 1215-16. The district court held that the first three of the five rationales were present and, therefore, the Commission's decision was entitled to considerable weight. Preston contends that the first rationale requiring a practical interpretation of the statutes does not exist. The statute at issue, I.C. § 63-3027, as it read in 1989, clearly stated in its title that the section was to be used when [c]omputing [the] taxable income of corporations.  I.C. § 63-3027 (1989) (emphasis added). Idaho Code § 63-3024, however, stated that a tax shall be imposed on the taxable income of any non-resident individual, trust or estate derived from sources within the state of Idaho computed as required by section 63-3027A, Idaho Code. I.C. § 63-3024 (1989). Idaho Code § 63-3024 then directed nonresident individuals to compute their taxable income using 63-3027A which was entitled, Computing taxable income of part-year or nonresident individuals .... I.C. § 63-3027A (1989) (emphasis added). A practical reading of these statutes indicates that Preston, as a nonresident individual, should have computed his taxes pursuant to I.C. § 63-3027A, not I.C. § 63-3027. Therefore, the Commission's interpretation of I.C. § 63-3027 is practical. The second rationale requiring the presumption of legislative acquiescence is also present. To find legislative acquiescence, the Simplot court held that `something more than mere silence is required'.... [W]e require `something more' to determine actual legislative intent than merely reenacting the statute after it has received an agency construction. J.R. Simplot Co., 120 Idaho at 864, 820 P.2d at 1221 (citations omitted). In this case the legislature evidenced its intent by more than mere silence when it repealed the statute that gave nonresident individuals the right to use combined reporting. Until 1974 the combined reporting provisions of § 63-3027 applied to both nonresident individuals and corporations. In 1975 the Idaho Legislature deleted the reference to nonresident persons from the text and title of § 63-3027 and enacted § 63-3027A. During 1975, § 63-3027A permitted corporations and any other taxpayer to use the allocation and apportionment provisions of § 63-3027. See 1975 Idaho Sess. Laws Ch. 32, § 2, p. 52. Idaho Code § 63-3024, which imposes a tax on an individual's income, was amended in 1976 to read as follows: 63-3024. INDIVIDUALS' TAX AND TAX ON ESTATES AND TRUSTS. A tax is hereby imposed ... upon that part of the taxable income of any nonresident individual ... derived from sources within the state of Idaho as set forth in section 63-3027A, Idaho Code. 1976 Idaho Sess. Laws Ch. 76, § 1, p. 247. Section 63-3024, therefore, directed nonresident individuals to compute their taxes pursuant to I.C. § 63-3027A, which does not provide for combined reporting. Furthermore, in 1976 the legislature deleted the cross-reference to § 63-3027 from the text of § 63-3027A. See 1976 Idaho Sess. Laws Ch. 89, § 1, p. 303. These changes in the Idaho Code evidence an intent by the legislature to prevent nonresident individuals from using combined reporting. The final rationale, agency expertise, is also present in this case. The Simplot court noted that, because the judiciary in Idaho is intended to apply a general background to the law, the expertise of an agency is often useful in technical areas of the law where the risks of failing to understand all of the implications of a decision are great. J.R. Simplot Co., 120 Idaho at 859, 820 P.2d at 1216. The area of tax is a technical area, and the Commission is an expert in this area. Accordingly, its decision should be given considerable weight. Because three of the rationales supporting the rule of deference are present in this case, there is no cogent reason for departing from the agency's interpretation.