SIERRA PACIFIC POWER COMPANY AND NEVADA POWER COMPANY, JOINTLY DOING BUSINESS AS NV ENERGY, Appellants,
THE STATE OF NEVADA DEPARTMENT OF TAXATION; AND CLARK COUNTY, Respondents
Appeal from a district court order granting in part and denying in part a petition for judicial review of an administrative order that denied a use tax refund. Second Judicial District Court, Washoe County; Janet J. Berry, Judge.
John S. Bartlett, Carson City, for Appellants.
Catherine Cortez Masto, Attorney General, and Gina C. Session, Senior Deputy Attorney General, Carson City, for Respondent State of Nevada Department of Taxation.
Steven B. Wolfson, District Attorney, and Paul D. Johnson, Deputy District Attorney, Clark County, for Respondent Clark County.
Norman J. Azevedo, Carson City; Jones Day and Charles C. Read, Los Angeles, California, for Amicus Curiae Southern California Edison Company.
Reese Kintz Brohawn, LLC, and Ryan W. Herrick, Incline Village, for Amicus Curiae Council on State Taxation.
Hardesty, J. We concur: Gibbons, C.J., Pickering, J., Parraguirre, J., Douglas, J., Cherry, J., Saitta, J.
BEFORE THE COURT EN BANC.
Appellants Sierra Pacific Power Company and Nevada Power Company, doing business jointly as NV Energy, bring coal into Nevada to produce electricity. Pursuant to NRS Chapter 372, NV Energy pays a use tax for its coal consumption. NRS 372.270 exempts from the use tax the sale, storage, or use of the proceeds of Nevada mines. The district court found, and the parties do not dispute on appeal, that NRS 372.270's tax exemption for locally mined minerals violates the dormant Commerce Clause of the United States Constitution, which prevents states from unlawfully discriminating against interstate commerce. We therefore do not consider the lawfulness of the statute as a whole, but
instead limit our review to the two primary issues raised in this appeal--whether the offending language in NRS 372.270 is severable and whether NV Energy is entitled to a remedy.
We conclude that NRS 372.270 is not severable because it is clear that the legislative intent of the statute was to protect local mines, and thus, the district court properly refused to extend the exemption to all mine and mineral proceeds. Violations of the dormant Commerce Clause are remedied by compensating for the negative impact to the claimant as measured by the unfair advantage provided to the claimant's competitors. See McKesson Corp. v. Div. of Alcoholic Beverages & Tobacco, Dep't of Bus. Regulation of Fla., 496 U.S. 18, 31, 40-41, 110 S.Ct. 2238, 110 L.Ed.2d 17 (1990). But because no interstate discrimination actually ...