chicago the ruling or decision of the administrative law officer indicated that the ordinance out of big us that even if it had been the city would prevail because a ruling number two which the department issued in two thousand and five it's our contention that the ordinance is not in big us but the city should not have prevailed and the reasons are that the ordinance never discusses the term consolidation of separate corporate entities as you're well aware under illinois law the general proposition is that separate corporate entities are distinct under the law and have their own wouldn't be a loophole that would allow a taxpayer business to be limited if you were ready for that question yes and in fact that's what it looks like there's that there's some sort of effort by the city to merge employer business and sometimes talk about business and look to the definition of business when really it's the employer i thought that determines the number for that week to reach that fifty employee threshold we have to look at the employer in the business but the business itself can't determine who the employer is because they're seeking to make him pay the same employer of different corporations i think that's correct in fact if you were to abide by their interpretation you'd be ignoring the work employer and as statutory construction rules are clear you don't ignore wording in the ordinance let me let me ask you where you play but to some extent the nine hundred ninety seven ruling in the two thousand five ruling must be reconcilable to each other and if they are not then you have to look elsewhere for the authority to have passed the two thousand tax ruling absolute you're saying that there is no authority because the one thousand nine hundred seventy ruling makes it clear that a b c cooperation with subsidiary whatever the the explanation or the example was example applies to this applies to these mcdonald's franchisees that's correct the example was two sets of affiliated corporations one with one hundred fifty employees one with a hundred and for reviewing his interpretation of ninety seven as opposed to the thousand well i think you have to look at the statutes in its entirety and because i did a difference at all i i don't believe so  that the stadt that the ordinance was ambiguous and therefore they are now reinterpreting it under their two thousand and five cats ruling as opposed to the nine hundred ninety seven tax ruling and i think the hearing officer simply said well that example that hundred ninety seven to two thousand and five but i'm unaware of any authority that says that an agency even though it has the responsibility to interpret its own enacting ordinances or irrelevant but you are conceding with bad egg that the city council could have could have changed the ordinance in any way they wanted to to support the two thousand and five packs ruling and actually change in the ordinance the two thousand and five packs ruling would have to have an impact from that point for it's clear the city council if they did and the department of revenue if they wanted to miss to reinterpret what they had already interpreted in one thousand nine hundred seventy could have gone to the city council and said we need a change in the language of the ordinance to allow us to now use the unitary group business group concept that exists in the i llinois compact sack and please change it for us and then from that point on we will treat all these mcdonald's franchise ease as a single employer when they have when they try to avoid the tax business concepts goes that group of three different owners of the franchise would amount to or could come within this definition if that was under the for the like the first will say in seventy two that that that you know those corporations would fit with them the traditional interpretation of the unitary business yes that you're not bringing that was it goes forward and course it isn't really relevant but but at least you would agree that they would fit into this unitary business group but you don't believe that the legislation ever supported that it doesn't it's not written that way and it still isn't that's right and it's not a reasonable interpretation in my mind because if you look at what the city council did with the original employer spends that sort as they refer to other statutes in do you do you remember what i used to take you're familiar with caterpillar and are you a familiar with or you read called the rationale for the concept of unitary business group i i believe it any constitutional question that might arise as to income earned in one state that might have been earned in another state that's usually that's correct right that's how it but in this case there is no constitutional question that sort of mandates that any unitary business group be concept be applied when the entire confines of the city of chicago limits if this if he is because the motivation for this concept has nothing to do with  business is all running within the city of chicago or softball i would argue the motivation is justified to justify the assessment and in applying this new test that the department has taken there's a real question of the constitutionality of that interpretation and i would argue that it wouldn't be constitutional to without notice suddenly create a new changed between nine hundred ninety seven and two thousand and five i have been the interpretation our position is that there was not a change that those to those to the bolton in the ruling can be rad consistently what about the sample and one that mcdonald's is relying on why doesn't that apply to the donald owners if it does not apply because that example dealt with affiliates but it did not say that all affiliates will always be treated separately different one hundred sixty one ok and each affiliate controlled the work and the pay of the employees will be shown over the fifty any mark so i don't what i did well the problem with the example between that and the two thousand and five tax ruling is that the point of the unitary business group is that the separation breaks down and you really have centralized management centralized control so that the difference t for these interpretations i mean is this the interpretation that was being used it is prior to two thousand and five prior to two thousand and four rather when that investigator was in the year when he started his investigation and doesn't for the spread prior to that were there specific examples of where the city was implementing this in the fashion that they chose to implemented for these mcdonald franchise other examples of th really didn't have any prior implementations such as this to back up his interpretation in two thousand and five and not sure i understand the question but was suggesting is there's nothing really in the record to suggest this interpretation had ever been used prior to the two thousand and five statement that now were interpreted to clarify the nothing indicating that the department did not consider it this way and we know they were by two thousand and four by the time they undertook this investigation i mean what happened was the department became aware of situations that m using them as in this example what if they had opened up a hotdog stand and using the same accounting the same everything else that the different mcdonald users would you throw in the hot dog stand with mcdonald's well i think that would be a question for the ministry to watch as i think that might depend on whether those are businesses in the same general i'll decide that what would decide that question for him by no one to no one doubts that manipulation is clean on here no one doubts that and the question is who can respond to that manipulation the department of revenue on its own where do you does the department of revenue have to go to the city council and say  manipulation is going on we'd like you don't modify the ordinance to allow us to treat these like businesses as a single employer because the language doesn't address that as it now stands there's no question about that the question is attention to the language of the right so what i wanted to say was if we look at the language of york itself you know first the taxes imposed upon you know every employer and then we look at what the the emphasis on business which i think is key allies where the ordinance groups groups employees together or for accounting who comes within the scope of the tax not based on deliberation cuts the paycheck but on who was hired in connection with the employer's business that's a starting point we have definitions for employer and also for business ok for employer that includes any person who with employees in chicago and we also know from the general principles of ordinance construction in the ordinance that a person may include more than one so we can start with the notion that employers can be comprised in person of course includes corporations and other legal sure so we know that an employer can be made up tease which are are you saying a subsidiary or independent yes all ok entities which are subsidiary or independent and that's modified by the next files and i'll get to that in just a moment but i do just want to posit for a second on that first class because i think this is clearly in the gates a reading that combining more than one entity is never allowed under the order i think it's clear that it is and then we need to discuss how to combine them there is this or this itself gives us t clues about when you combine them one would be as the plaintiff of emphasizing section twenty thirty has to be a part of the employer's business entities really need to be to belong to the same employer and we do have  and when you have who are the elite of the definition of employer to find out if that applies as opposed to the business stuff and look to the definition of the employer and also the common understanding south of the meaning of employer and independent if i don't know that that phrase offers any help in in trying to figure out what is what is really meant here well it includes everything even your subsidiary or your independent well then we'll turn to the next independent businesses can be combined for purposes of tax and you're relying on on the definition of business and employer and you know that coupled with who is the position that the city is taking because you run into the problem of having business entities which would technically meet the definition of being taxable but him different it's impossible to make sense of the two without reading that you've got to read the two of earlier how much commonality does there have to be i can understand where if it's a husband or wife owns one mcdonald's under a corporation a they the two of them owned a mcdonald's corporate mcdonald's restaurant under b but in mcdonald's see a chic is with another owner i mean why should why should that other owner be put in with the other two big bottles which is the example which is the situation right here why why shouldn't those two mcdonald's with the same owner be grouped together and treat that other mcdonald's with a different owner to break that link and this is exactly right that the two thousand five ruling makes sense because it requires common ownership is one of the factors you don't have common ownership in one of the cases we have a woman owning one mcdonald's the same woman owning a second mcdonald's and then the woman and her son and  you're suggesting that maybe the relationship between the mother and son is enough to give common ownership but then how far do you carry that maybe a nephew i mean a son in law i mean called it well the the really tense in house is how far to carry it because  whenever like licenses or are issued because these are individual licenses the city's issuing and require that ownership information be disclosed so that they can determine that whether or not there's common ownership and therefore should be treated as a single about half of us want to clarify back to the point we're discussing just before that about about whether or not the department's interpretation was consistent before and i don't think the question turns on that although there is no evidence or anything in the record to suggest the party didn't even if it did i think the director would still be free to change in light of changed circumstances or new situation problems that arose to issue that you thousand and five and even if it had not dealt with this or  even if it were inconsistent you know that inconsistency would need to be explored to see if that's really left or that's meant that it's not completely dilute that that can be an appropriate and reasonable interpretation of the art now  was it a form of giving notice to the owners because they really didn't because these investigations started in two thousand and four and maybe nobody should really if that's what it means to do should only apply henceforth after two thousand and five but you wonder why two thousand five have to because the reason the department would issue the ruling at this time is because of course even as a lot of these investigations it became aware of noncompliance and that's when you but we don't need that to comply you don't have you don't need the two thousand five rolling to force compliance because your position is that you are then self gives the department of the wording to force compliance without the two thousand five ruling the ordinance that is due that it did not contain this specific factor business and i wanted to point out that the modifier to that you have one minute ok it is modified by conducting operations for the benefit of others and not themselves and so that's where you get this notion i think of control or looking at what's really going on with the independent entities are they really exist being in their own you know bubble making profits putting back into the corporation paying their their their stockholders their art are they doing so to benefit someone else and that's when you get the kind of arrangement like what we have here where these individual mcdonald's corporations weren't keeping the profits or the strip or distributing derivatives but were finally and there was a fine think the key factor this course should be aware of is that texan statutes are to be strictly construed first national bank of springfield versus department of revenue and the dance material company in department of revenue case we know the cases we know the kind i think everything turns on that clearly you have to look at who who the tax is assessed day to it's the taxpayer and that was clearly defined and everything that comes after that by the department of revenue that tries to expand that when it's clear and strictly construed in the ordinance it should be ignored thank you very much