Opinion ID: 2615205
Heading Depth: 1
Heading Rank: 2

Heading: the dealer discount

Text: The Department of Taxation and the Tax Commission denied Saveway the two percent dealer discount on the authority of NRS 365.330(2) and Tax Commission Motor Vehicle Fuel Tax Ruling No. 1. NRS 365.330(2) provides as follows: From the tax found to be due upon any statement duly and punctually rendered, the dealer or user shall be allowed to deduct 2 percent thereof to cover the dealer's or user's costs of collection of the tax and of compliance with this chapter and the dealer's or user's handling losses occasioned by evaporation, spillage or other similar causes. Motor Vehicle Fuel Tax Ruling No. 1 provides in relevant part as follows: 1. Except as provided in subsection 2, if the return, report or statement is not filed together with a remittance for the amount of the tax due, on or before the 25th day of each calendar month, the discount provided by NRS 365.330 will not be allowed. 2. A statement, report or return which is filed pursuant to an extension granted under NRS 365.170 shall be deemed to be punctually rendered for the purpose of the discount. NAC 365.101. Appellant contends that a statement is not duly and punctually rendered if it is not submitted by the 25th of the month pursuant to NRS 365.170, [1] and that the Department is simply not authorized to allow the two percent deduction when the return is untimely. Appellant is incorrect in asserting that the statute mandates disallowance of the deduction when the return is filed late. The statute does no more than require that the discount be allowed when the return is timely; it is silent as to whether the Department has discretion to allow the discount when the return is late. However, Motor Vehicle Fuel Tax Ruling No. 1 (NAC 365.010) fills the gap in NRS 365.330, by specifying that if the return and remittance are not received on or before the 25th day of the month, and the due date is not extended under NRS 365.170, the statutory discount will not be allowed. A properly adopted substantive rule establishes a standard of conduct which has the force of law. State Board of Equalization v. Sierra Pacific Power, 97 Nev. 461, 464, 634 P.2d 461, 463 (1981). See Higginson v. Westergard, 100 Idaho 687, 604 P.2d 51, 54 (1979). Rules adopted by an agency are binding on the agency until the agency repeals them or a court declares them invalid. See Burke v. Children's Services Div., 288 Or. 533, 607 P.2d 141, 144 (1980). Saveway has not challenged the rule in question. Even if it had, we will not readily disturb an administrative construction that is within the language of the statute. Pub. Employees' Ret. Bd. v. Washoe County, 96 Nev. 718, 615 P.2d 972 (1980). Great deference will be afforded to an administrative body's interpretation when it is within the statutory language; moreover, the Legislature's acquiescence in an agency's reasonable interpretation indicates that the interpretation is consistent with legislative intent. Sierra Pacific Power v. Department of Taxation, 96 Nev. 295, 607 P.2d 1147 (1980); Oliver v. Spitz, 76 Nev. 5, 9-10, 348 P.2d 158, 160-61 (1960). See Homewood Investment Co. v. Moses, 96 Nev. 326, 330, 608 P.2d 503, 506 (1980). The Commission ruling in question has been in effect since 1970, and the Legislature has not seen fit to disturb it. Under the ruling, the Commission properly denied Saveway's request for allowance of the two percent dealer discount for the June 1977 return that Saveway filed past the July 25 deadline. Saveway contends that disallowance of the deduction constitutes a penalty, and that the Department should have relieved Saveway from this penalty, pursuant to NRS 360.410(1), [2] for the same reasons that it waived the $300 penalty. In essence, Saveway argues that the waiver of the $300 penalty implies a finding pursuant to NRS 360.410 that it was not negligent, and that under such circumstances it is an abuse of discretion for the Department not to waive the loss of the dealer discount. [3] Saveway cites no authority for the proposition that failing to meet statutory criteria for an entitlement is the same as being assessed a penalty. Even if disallowance of the deduction could be characterized as a penalty, Saveway fails to address the limitation on the Department's discretion created by NAC 365.010. Pursuant to the fuel tax ruling, the Commission properly denied the dealer deduction to Saveway on the basis of the late return. THE ASSESSMENT OF INTEREST NRS 365.340(1), the statute under which the Department assessed the $300 penalty (later waived) and interest against Saveway, provides as follows: If the amount of any excise tax for any month is not paid to the state on or before the 25th day of the next month thereafter as prescribed by this chapter, it shall become delinquent at the close of business on that day, and a penalty of 1 percent of such excise tax shall be added thereto for delinquency together with interest at the rate of 1 percent per month or fraction thereof until paid; but in no case shall the penalty be less than $10 nor more than $300. Saveway contends that the assessment of interest is in itself a penalty, and is subject to the $300 limit. Saveway also asserts that the interest penalty should have been waived, given the implied findings underlying the waiver of the $300 penalty. The assessment of interest does not constitute a penalty within the meaning of NRS 365.340 and NRS 360.410. NRS 365.340 clearly distinguishes between the penalty and the interest to be assessed against delinquent returns. See also NRS 365.350 (prosecution of actions to collect delinquent tax, penalties and interest). The purpose of a penalty provision for the late payment of a tax is to encourage the timely payment of the tax and to punish those who do not pay on time. North Slope Borough v. Sohio Petroleum Corp., 585 P.2d 534, 546 (Alaska 1978). The assessment of interest, however, has no punitive element, and is nonpejorative; the taxpayer must pay interest on late payments for the same reason the state must pay interest on overpayments. Id. Even where statutory penalties are waivable, interest may not be waived. Id.; see Morrison-Knudson Co. v. State Bd. of Equalization, 58 Wyo. 500, 135 P.2d 927, 936-37 (1943). Therefore, the Commission properly assessed approximately $5,000 in interest [4] against Saveway pursuant to NRS 365.340(1) for the latter's late filing of its fuel tax return and remittance. Because the lateness of its return disqualified Saveway from receiving the two percent dealer deduction, and because the statutorily mandated assessment of interest is not a penalty and may not be waived, the district court erred in enjoining the Commission from imposing interest and loss of the dealer discount on Saveway. We therefore reverse the judgment of the district court and reinstate the decision of the Nevada Tax Commission. MANOUKIAN, C.J., and SPRINGER, STEFFEN and GUNDERSON, JJ., concur.