Catherine Cortez Masto, Attorney General, and Blake A. Doerr, Senior Deputy Attorney General, Carson City, for Appellant.
Justice Law Center and Bret O. Whipple, Las Vegas, for Respondent.
BEFORE HARDESTY, PARRAGUIRRE and CHERRY, JJ.
In 2011, this court affirmed a district court order granting respondent Masco Builder Cabinet Group a tax refund for overpaid taxes. Thereafter, appellant State of Nevada Department of Taxation refused to pay interest on Masco's tax refund, arguing that (1) Masco failed to demand interest in its initial refund claim, thus waiving its right to interest; and (2) NRS 372.665 permits the Department to withhold interest on tax refunds owed due to the taxpayer's intentional or careless overpayment, and because no determination as to the applicability of that provision had been made by the Department, no refund is due at this time. We reject both arguments and affirm the district court's order awarding interest.
FACTS AND PROCEDURAL HISTORY
Masco filed a claim with the Department for a refund of overpaid taxes. The Department denied Masco's claim, and Masco litigated the matter before an administrative law judge (ALJ), who concluded that Masco was entitled to a refund. The Department appealed the decision to the Tax Commission, which reversed the ALJ's decision. Masco then filed a petition for judicial review in the district court, and the district court reversed the Tax Commission's decision, resulting in a refund award. The Department then appealed to this court. In State, Department of Taxation v. Masco Builder Cabinet Group, 127 Nev.
__, 265 P.3d 666 (2011), we affirmed the district court's order concluding
that Masco was entitled to a tax refund as initially granted by the ALJ.
According to Masco, after this court's decision it sought the status of the tax refund and interest from the Department. Without a response from the Department, Masco filed a motion in the district court for judgment on the refund. In that motion, Masco also argued that it was entitled to pre- and post-judgment interest pursuant to the general tax statutes of NRS Chapter 360 and the sales and use tax statutes of NRS Chapter 372. The Department opposed Masco's motion, contending that Masco failed to request interest prior to this court's final ruling, thus waiving its right to do so. Additionally, the Department argued that any interest allowed under the tax statutes was limited by the Department's right under NRS 372.665 to deny interest if it determined that an " overpayment [of taxes] has been made intentionally or by reason of carelessness." NRS 372.665. Because the Department had not had an opportunity to determine whether interest was barred by intentional or careless overpayment, the Department asserted that the district court could not award interest at this point.
The district court granted Masco's request for pre- and post-judgment interest, finding that the taxpayer is not required to affirmatively request interest. The district court also found that the Department should have made a determination of whether Masco acted intentionally or carelessly under NRS 372.665 when it was finally determined that Masco was entitled to a refund, and because no such determination was made at that time, Masco was now entitled to interest upon its post-judgment motion request. The Department appeals.
We are asked to determine whether Masco waived its right to seek interest because it failed to demand interest in its initial tax refund claim, and whether NRS 372.665 permits the Department to withhold interest on the tax refund until it determines whether Masco's " overpayment [of taxes] has been made intentionally or by reason of carelessness" under NRS 372.665. Whether and under what circumstances interest is required on a tax refund is a question of law, and this court reviews questions of law de novo. Schettler v. RalRon Capital Corp., 128 Nev.
__, __, 275 P.3d 933, 936 (2012); see also Hardy Cos., Inc. v. SNMARK, L.L.C., 126 Nev.
__, __, 245 P.3d 1149, 1153 (2010). We conclude, as a matter of law, that Masco did not waive its right to seek interest and that the interest is due and must be calculated at the ...