142 Nev. Adv. Op. 38
Nev.2026Background
- NHBAC is a nonprofit formed to fund, design, construct, and ultimately transfer a medical education building for UNLV School of Medicine. 1
- NHBAC applied for a Nevada sales and use tax exemption, but the Department denied the application for failing the educational-organization criteria and later relied on NRS 372.340. 2
- The Commission summarily upheld the denial, then on remand issued findings endorsing the Department's NRS 372.340 reasoning, and the district court affirmed. 3
- The Supreme Court reviewed the agency's legal conclusions de novo and agency action for arbitrariness, capriciousness, and legal error. 4
- The court held NHBAC qualified as a charitable organization under NRS 372.3261 and that the Department erred by not applying those criteria. 5
- The court also held NRS 372.340 does not disqualify already-exempt nonprofit organizations and reversed with instructions to grant the exemption. 6
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Must NHBAC be evaluated under charitable-organization criteria? 7 | NHBAC said reconsideration allowed review as charitable despite a scrivener's error. | Department said NHBAC applied only as educational and could not switch classifications. | Yes; the agency had to consider NHBAC as charitable. 8 |
| Does NHBAC qualify as a charitable organization? 9 | NHBAC argued its purpose, documents, and federal charity status satisfied NRS 372.3261. | Department did not meaningfully address the charitable criteria. | Yes; NHBAC met the statutory charitable-organization criteria. 10 |
| Does NRS 372.340 bar an otherwise-exempt nonprofit contractor? 11 | NHBAC argued NRS 372.340 only taxes specific transactions and does not defeat exemption. | Department argued NHBAC's UNLV contract made it a disqualified government contractor. | No; NRS 372.340 does not apply to already-exempt nonprofits. 12 |
Key Cases Cited
- State, Dep't of Bus. & Indus., Fin. Insts. Div. v. TitleMax of Nev., Inc., 135 Nev. 336 (Nev. 2019) (judicial review of agency decisions and de novo review of legal conclusions 13)
- United States v. State Eng'r, 117 Nev. 585 (Nev. 2001) (agency interpretations may receive deference in technical contexts 14)
- Redev. Agency of City of Sparks v. Nev. Lab. Comm'r, 140 Nev. Adv. Op. 44, 551 P.3d 303 (Nev. 2024) (agency interpretations outside plain text do not control 15)
- Jim L. Shetakis Distrib. Co., Inc. v. State, Dep't of Tax'n, 108 Nev. 901 (Nev. 1992) (agency action may be set aside for legal error; tax exemptions are strictly construed 16)
- McKay v. Bd. of Supervisors of Carson City, 102 Nev. 644 (Nev. 1986) (statutory interpretation begins with the plain text 17)
- Campbell v. Nev. Tax Comm'n, 109 Nev. 512 (Nev. 1993) (taxability is presumed unless a specific exemption is established 18)
- Dep't of Tax'n v. DaimlerChrysler Servs. N. Am., LLC, 121 Nev. 541 (Nev. 2005) (tax exemptions are strictly construed and legislative history may resolve ambiguity 19)
- Int'l Game Tech., Inc. v. Second Jud. Dist. Ct., 122 Nev. 132 (Nev. 2006) (courts construe related statutes harmoniously to avoid conflict 20)
- State v. Kelly-Ryan, Inc., 110 Nev. 276 (Nev. 1994) (addressed a general contractor under tax law 21)
- Maecon, Inc. v. State, Dep't of Tax'n, 104 Nev. 487 (Nev. 1988) (addressed a general engineering contractor under tax law 22)
- Steiner Constr. Co. v. Comptroller, 121 A.2d 838 (Md. 1956) (private contractor working with a tax-exempt entity is not itself exempt 23)