and the denominator is the revenue as a person everywhere the statutory construction question is whether as the director found what the parties are calling flow through miles are revenue miles in the as the tax payers claimed so turn to the stage for construction question are the flow three miles robin miles in this state and i'd say that the plain language of the in the northwestern case wasn't focused on the statutory definition the northwestern case came to north with your lies just came to the conclusion that if you did include the fly over miles then that would pose a constitutional problem that there would be a lack of constitutional nexus and i didn't have to talk about that that was really more about a congress plus like a nexus issue but on the actual statutory construction question with the flyer miles in this state actually northwest is instructive because they rejected this type of of linguistic parsing that the taxpayer wants to put forth here  this limiting condition that's not there they read the statute as if it you know said miles that are in the state providing that the guest history begins or ends in the state and of course nothing like that is in the statute in courts to  there anyone or anything in order to safely traverse or travel over the line was there nothing of those the those are the factors that the northwest airlines car was looking at that there really was no meaningful connection of any kind with illinois in that case there was no physical connection there was no economic connection there or their activities just had nothing to do with illinois which is a very different situation and is why there is a substantial nexus here where you have all of these significant s subject a significant regulatory network so all of these substantial connections that they have with illinois which pertain in exactly the same way to gas that is traveling through illinois or  stops in illinois all of those connections are the same the same and they're all called they're all brought into play for all of their gas transportation activities and that is why there is a substantial nexus here and that is why there is no commerce  instruction issue besides the plain language the construction of the department is putting forth also fosters the purposes of the act and that's to tick yes under to pursue resulting in one hundred percent  apportionment and actually the northwest airlines court again recognize that they recognize that there was this legislative intent to avoid precisely these types of gaps because you would you would wind up with these nowhere miles that are taxed any state because they s because they're not going in the numerator under the taxpayers of you you'd have the scout and the northwest airlines court recognize that that is something to be avoided wherever possible but the only real option being this constitutional problem of  section this amendment and specifically mention this situation and that's an indication and that's what i like to talk about next because i think that's the third part of the statutory construction question the plain language the purposes favor the department's construction and then that the final pieces will what about these amendments what do we make of these amendments and and do they affect the construction here and the answer to that is that the tax payers are allowing these amendments that created a new section three zero four d and that sets forth the formulas going forward in the future for all now the past but future that for years and being after december thirty first two thousand and eight and the circuit court the taxpayer said well look there's amendments they get that they change the law for the old gesture just meant something different the circuit court had the same view and that seemed to be the whole basis for the circuit court's decision nothing in the amendments do is they scrapped the old revenue miles horseman system right they have a new language correct terminology and they're really different receipts all receipts and then groceries their place with a whole changed to the grocery seat system it necessarily referred separately to intrust state trips and inter state trace and that's the language of the text here is focusing on and the reason for that is because a gross receipt is not a geographic unit like a model so the legislature had to go out and explain a little more detail the gross receipts met and that's old revenue miles system under three or four d two doesn't include any specific references to intrust state or interstate trips it doesn't break them out and it doesn't do that because there was no reason to do that and that's because we're looking at miles in this state that's already a a geographic measure it is self limiting and includes both the intrust state trips in change to grocery state system and they actually include more specific references to the interstate in trust state travel but they're not adding anything new there know what they're not doing is newly including these folks who trips in the numerator the same idea of getting intrastate on the illinois component of interstate activity is in both but using a little different wording but they're using different wording so that system which is now keeping track of different things it's not based on revenue miles at all so it is keeping track of different things entirely from the old you get there not to comply companies are keeping track of the miles that are moving can check their receipts and they have many advantages for the department and for the taxpayers because it's easier ministre to believe for your package delivery companies that start and stop the rot tard keep track of your wait a longer route yes it's more in line with  how non transportation companies are taxed actually because now they're just the sales factor for them so this gross receipts measure is is more similar to that but what is not doing is  somehow including these flow through interstate it's not apportioning income from so through interstate trips for the first time when that wasn't done under three hundred forty two that same type of thing was included it was included within the language of in this state revenue miles in the state it was all caught up with the met there's this notion out there that for a portion of purposes you want to apportion one hundred percent as much spot so that everything is at least tax portion of this business or activity that is in illinois but there's nothing that prohibits is there in a particular services provided prong and both of those are satisfied here there's no constitutional problem here or looking at the substantial nexus prong the the record show that there were many significant connections without which you know they can't move the gas to the pipelines they own land in illinois for the compressor stations they have easements for the pipelines they employ steps of illinois workers they're subject to extensive environmental regulation reporting and these still bullish substantial nexus to support imposing an illinois income tax and that should and the inquiry and the taxpayer concede that those are but they want to carve out this exception just for the activities involving the flow through trips and that that type of exception it doesn't exist the flow through trips just like the other trips have a substantial next own noise because the flow through traps are a direct part of the text fears operations in illinois and they're making direct use of  there was no meaningful connection between illinois and wire them miles and it's worth looking at the court's language what the court said was script the united states supreme court cases they all involve they don't address the central nexus questions they involve different types of taxes which is significant because you're not looking then at the connection between illinois income producing activity and they present different specified here when you look at the relevant united states supreme court authorities because they are receiving understeer that they receiving the benefits of these governmental services like police and fire protection public roads transit medication that make it easier to conduct business and have a workforce the use of state judicial systems they don't just get that they receive those but they say well we paid for those because we paid income tax and we didn't receive any additional services specific to the full three miles but under the law in the between specific activities and the governmental services so they don't get that carve out they rely on a case called american river transport but the basis of the appellate court's decision in that case was simply that this question to tax payers clete these lines tugboats didn't receive any services from illinois they only received services from the federal government here illinois providing services so the second probably satisfied as well so there is no constitutional problem with the would be receipts that originate and terminate in the state and also a portion of the receipts from shipments of gas testing through into or out of the state this pacifically know how to say but want to get items that are passing through the state the general simply knows how to say it and they did say it in the first amendment which was at the two thousand and seven and then they went further and amended section eighty three through a forty three second time and everywhere but they didn't do that not that they actually use specific language which they also put it done in the prior statute because what you're asking us to do is change the language from the revenue miles of the state to revenue miles in the through the state which we believe shows the difference and in northwest this court held that review is to know and you know tax this is an imposition statute not an exemption statute and that therefore construed there's doubt in favor suggest going back to the desperate language as opposed to our last question the facts are sort of different in northwest where i mean here in illinois you have these compressor stations correct that is correct and court said why we're over passing through it all the same type things just go in starting in originating outside the state and terminating outside the state yeah i believe what the court referred to ok and i don't so i don't think that the fact that it was in the air space post ground space that alone is if the difference i think both are just passing through the state and that i do with the statute reads in the state those would not be considered in this state sells property comparable weaver sells in the state over total self property total property and payroll in illinois for people but the legislature general simply deviated from that with respect to the taxing it is this that does business in multiple states is to attempt to apportion to each company that portion of that company's business that they conduct in a you're stating it for the three factor formula which was generally applicable in the time you're here for companies filing in many states i think that the low supply general assembly can tax one hundred percent less but they do not have to tax one hundred percent why all those connections we talked about and those connections apply in the same way for the flow through trips as well as for trips that might start and end in illinois so you're really looking at does illinois the question for substantial nexus is really tax on a consumer's purchase of a phone call there's a bit of a dicta in the case that perhaps these electronic pathways that are traveled by the signals the pathway this trial by the electronic signals that eventually become the phone call might lack a substantial nexus to state it passes through for the purposes of taxing the purchase of the phone call with the courts looking at and so it's different right there it's looking at the purchase of the phone call not increasing activity at the different taxes the sales taxes are treated differently but also with the courts looking at and saying well there might not be a here is the fact that there were billions of potential pathways it was impossible to trace where these electronic signals might go there really to family and insubstantial in any way  to create some type of nexus and that's a very different situation here where the taxpayer has this extensive in state operations with they need the operations in state to move the gas they have the substantial staffs so it's a very different situation than these ephemeral electronic signals taxpayer has also said well if the only change in the amended statute was switching to discuss receipt system well they didn't they just say gross receipts in the state versus gross receipts everywhere and i think that that illustrates my point the they didn't because when you're talking about gro mean when we're going to consider gross receipts in the state they didn't need to do that with the revenue miles system because the mile is a geographic measure so you get the same you including the same bundles of things essentially under both  systems they just included the more specific language in the amendments where they didn't need to do that with the revenue miles because you've got the same things counsel suggested that the northwest court  said that while passing over passing through it's all the same thing but but that's not what was occurring in that case the court there was not looking at whether these airlines are passing over per se it was really looking at whether there's any meaningful connection between those fly over miles and illinois and there was not in that case but here there is probably reasons we've discussed or the substantial connections because of these extensive instate activities which are brought to bear in the case of the flow through miles so the court present in northwest airlines wasn't making any general pronouncements about something passing through can never or over through whatever can never be substantial nexus and less of the court asked about this goal of substantial portion and that is a goal i think the g t e illustrates that that's a goal in these circumstances as well because the northwest airlines court notes g t e and says yes we recognize there's this goal and northwest airlines of course does deal with transportation companies and is really  here so you do have that same goal of one hundred percent portion that less than one hundred percent apportionment might occur where you know there's a state that doesn't adopt an income tax at all or where a state exams a particular class of tax accorded to the department's decision there are cases that described as substantial deference and i think the court will if the deference a considers to you thank you for those reasons in the