location where under the car and according to the city that that transaction comes within the city jurisdiction could require that entity to collect the tax and i submit to you  power whatsoever over that transaction so the fact that it's simple and we just agreed aren't much with the with the position of the city that it's a simple process to get the exemption but that's it it's quite  hurts our enterprise can simply pay twenty five percent to pay a tax on twenty five percent of the rentals i city residents now you can see from that the simple description of that process that has not absolutely nothing to do with the use of cities does it matter how many how many of those transactions how many times or less these you city streets twenty five percent of all transactions  subject to direct payment by the less or they have nothing to do with the use of city streets by the lessee and that process is clearly unauthorized by the ordinance and it's clearly well beyond the power of the city to tax leases that and that's what that has a tax on leases these leases occur completely out of the city of the other the other way a tax if you're doing business in the city you're you can be required to collect taxes from a half of the city we gave some examples in our brief i'll give you another simple one if a shoe store has a location in chicago and another one in milwaukee the transaction occurred in the in the county ah the dealer brought up wholesale liquor dealer brought liquor in to cook him to cook county and it was because they brought liquor into  powers of the city in that case if the tax collection price was seizures and responsibilities and commercial national bank are invalid and so are the procedures in this case this morning in may it please the court likely to grow on behalf of the first corporation i'd like to build on a couple of the points raised by mr ford and in doing so to touch upon what i think were the two errors that were made by the lower cour one involves the fact that there was it was a use tax issue in this case and what effect that has on the analysis and the second error was the lower courts the appellate court's decision to rely upon due process case law a valuating the challenge under section six a of article seven the extraterritorial taxation challenge i think those are the two legal errors at issue in this case and i think that if we return to first principles for section six eight both of those errors why there  any and what the right answer is comes into sharp relief as this court has repeatedly recognized and as we point out in detail on page eighteen of our opening brief the framers were very concerned in cracking section six say that there not  unchecked extraterritorial regulation on the part of home rule units and is this court has repeatedly recognized the the reason this is a concern of the potential problem here put it in the words of this court in commercial national bank they referred to the collection agency unless there is a physical connection between bad agent that extraterritorial entity and the transaction at issue now the reason for this becomes fairly clear when you think about the potential for chaos for the serious problems without that it's that rule that requirement of a physical connection between the tax collector and the home rule unit that avoids a circumstance in this case for example in which one could walk into a rental agency and be presented with a list of twenty or fifty or all two hundred home rule jurisdictions in the se and be asked as a customer to allocate your predicted driving and use among those jurisdictions what prohibits that from happening is the requirement that there be some physical connection could be delivery into the jurisdiction it could be that the transaction itself is executed in degree but some physical connection between the transaction at issue and the home rule unit and that is a rule to which this court has consistently hued now the confusion below i think is the fact the transaction is part of that an or any other kind of tax is the right i gave a moment ago it's only that requirement that there be that connection to the transaction that physical connection that's the only thing preventing the serious problems that this court has identified in commercial national bank and i will hold court was talking in this particular passage i'm about to refer to not it wasn't the actual territorial portion of the union i think it was in the occupation tax origin of the opinion but the bottom of page sixty nine of the top of page seventy of commercial national bank this report outlines and puts some real detail on its vision of what that serious problem would look like and the description the court provided is equally applied to what would happen in our brief the apollo court made the mistake of relying upon due process federal due process case law to understand the limits of section six and in particular the phrase pertain to its government in affairs that's the phrase in six a that this court has referred to as imposing a limitation a strict ban on extraterritorial regulation it is reporting that phrase the lower court relied upon the ground furniture case which is a federal constitutional challenge and more broadly in the briefing before this court the defendants have asked to rely upon due process cases a string of them including the earlier industrial case which is a case decision by this court again as a matter of federal constitutional law the reason due process has no role to play in the reason it's critical to distinguish between a due process analysis and a home rule section six and houses because they could not be more different in terms of individual liberties sixteen section six a in contrast as we've just talked about really exists for a very very different reason six a is not concerned about the individual liberties six a is concerned about the structure it's a structural protection against the serious problems that would arise if different jurisdictions were permitted to impose competing taxes on and on and cities rather in those various jurisdictions it's a laundry list of two hundred plus home rule units each of them lay independent claim to a use tax on a rental vehicle for example that's an entirely different inquiry in that structural inquiry requires far more in terms of a physical connection and that's why this court has consistently applied that rule whether it be the mulligan case where there was physical delivery into the jurisdiction whether it be commercial national bank where this court struck down the fact that a tax is being imposed in part transactions that had no physical connection to the taxi and city and on that note there is as we identify a separate constitutional there so i've talked about the broad six a problem the fact that they a tax collector without the necessary physical connection to the transaction and they have therefore opened the door to what this court has strenuously tried to avoid this piracy the second independent there is not also actually commercial national bank the second independent care actually doesn't call the fact that this is a huge tax on like the first one the second error is the fact that they're taxing one hundred percent of the value the full nine percent on the lease pri independent concern and a constitutional challenge also covered by commercial national bag of their answer to that and i'll be brief their their response the defendant's response on commercial national basis is back case involved a service tax and not a use tax but there's nothing in the logic of the opinion i can come up with anything as a matter of constitutional law that would make any difference there the fact is half of what was being taxed occurred in the jurisdiction of this words that's impermissible as a matter of section six  that's precisely what's happening here and so that is the second independent argument being made independent the fact under section six that if the court has no questions ordinance to begin with just to clarify there has been some confusion the briefings i hear at last this morning that this is not a tax on the least transactions that occur outside of the city  based on the privilege of living using inside the city personal property that is lease for rented from outside the city so if you're running from a location outside of the city chicago the taxes on use inside the city and the taxes only charge when there is  exercise in our pertaining to the government and affairs of the city including the power to tax out there is a requirement that the transaction in which tax collection occur is i'm not aware of cases says that t insides and also every single time the tax the buyer it is their vehicles its purchase vehicles as enterprises vehicles that are being driven inside the city of chicago having them like taxes for the use of their property inside and there is a presumption that comes into play which presumes that a chicago resident is using renting from this location within that three mile order of the city of chicago is using well most of the time in the city of  chicago and that presumption is consistent with the ordinance which of course as i just mentioned requires tax collectors to keep records of taxable use and exemptions and when they fail to do so out the comptroller makes an assessment based on broken down or in that where where the owner is in between the angles that sort of thing and there certainly may be occasions i normally when someone rents a short term vehicle rental you know they know where they live they know where they work they know what their plans are for the next few days or for the couple of weeks from now whether they're going on a vacation they go where they go to school where they parked cars overnight raji cow disease in the city of chicago it's it's not very tenuous it's not it's reasonable to expect  that that your average lessee is going to have is going to be able to answer that question with reasonable certainty because they know generally what they're going to do there may be some locations that they may be unsure impractical i'm the exemption in that situation and of course this is a facial challenge though if there is some clay haste as opposed to the lying about whether or not the exemption applies that's not a reason that facially validate this this enforcement portion of that ruling no i'm referring to section three and and specifically there are two questions that are asked of that we have asked of last season about whether they'll be using home is evidence of use inside the city of chicago moreover i would note that the the actual tax is collected at the time of rental payment and that may or may not occur before often the rental payments as it's for it's agreed in st usually that happens at the end of the rental period  bank but i would like to know around difference that they ignore is the least of their property so if we feel we are dealing with a tax on services or attack on sales those kind of situations do not if this is the actual usage of the vehicle when the rational and the person coming from outside the city using the car to drive only in the city not be subject to tax what's the rationale for the being a resident of city of chicago to give there you know in between vehicles that sort of thing and so there's a you know maybe a higher likelihood that we're going to find taxable activity but certainly the tax would still be zero under the ordinance for  within the city of this regulation though would not apply and that's from the same as far as setting the amount of the percent of the rental price that does not make this tax extraterritorial that was a part of this court's rationale amongst other reasons for finding the service tax at issue in commercial national bank extraterritorial but used taxes are different traditionally they're set at a fixed rate for the privilege of using as much or as little as a user wants and the how it's done in the illinois use tax act that's how it was in that urban industrial case and that's why the court rejected proportion adjustment in a case we cite in our brief first access to material handling since there is one generally charge for any amount of use of chicago used charging that amount does not amount to taxing to be that occurs outside of chicago and this group court reach just like conclusion in the urban industrial case which i realize was a  with a regulation such as because the lessee is only going to zero the tax in the jurisdiction that he or she is using the car more than half the time it is exactly fifty fifty between two jurisdictions well then that lessee can pay the that the collection has also occurred in the taxing jurisdiction and national geographic it is the case with a labyrinth on her brief holds just the opposite there was a presence of just to add sales office in california justify imposing attack by chinese change for the municipal services provided both there she should go locations and for their vehicles that are being used in chicago we also submit that ruling eleven does not exceed the chicago personal property ask for is intended to do to provide evidence of use not to displace the ard so for all these reasons the contra war is explanations how cordons applies to short term are rentals few points raised by counsel for the defendants it's essential from the outset to make clear yet again that the challenge here is not to other than the fifty percent translates one hundred percent use the challenge here is not to the underlying which intimacy of taxing for use in the city as a general concept or even here the challenge is not to the idea that the city could go to springfield and see general assembly authorization as section six elsewhere provides for an extra territorial tax or they could you know add to a parking tax or gas tax other things that within their jurisdiction would capture use of a vehicle within their jurisdiction that is not the challenge here the concern we have about well i should add or is this a challenge to the degree of fit between the three mile barrier of the presumption that feeling raise and use in the city this isn't sort of an equal protection challenge or another constitutional challenge where the rationality of the fit the connection is what's at issue they may be right they may be watching your way about the theater the likelihood that these are being used presumptively within the city what matters is that they have someone outside of their borders to engage in the tax collection recordkeeping after that's what's critical here again nothing to do with the legitimacy of trying to actual value for use within their borders out there was some all that is part of the transaction and the reason there needs to be a physical connection is to avoid the issue that i mentioned at the outset which is coming in and getting a form with two hundred overrule jurisdictions they've noted that no constitutional moment that in this case the presumption turns on having a chicago driver's license her address within the sit that's not part of the constitutional analysis so there's nothing to prevent under the constitutional period  collection of two hundred home rule us from around the state and you have to go through and figure out where you intend to use there are none of the limited principles they've discussed whether it be business location well that's heard it's all over the state enterprises all over the state other businesses are all of the state that doesn't provide a limit necessary to avoid the serious problems as this court has described that's why some physical delivery that limits that means that transaction you can be assuming each of those receptions had an analogous ruling alive and you could be asked about how much time in evanston how much time in the city and how much time in the county which of course in bodies all at once and the sit and you could be asked about this in all three and in fact you could be fifty fifty and one hundred you could actually be taxed fully in all three jurisdictions under the current rationale that even that the fifty percent is what creates the trigger so none of the things they've talked whether it be the fact that you have a business location the fact that you're driving int jurisdiction none of those limits the number of potential jurisdiction that could be imposing their own tax regimes with their own independent record keeping requirements with their own auditing measures all of those could be stacked one on top of another under the constitutional principle that's being advanced that nor is there any i should mention magic to the fact that within three miles i think that that came up in the course of discussing how irrational the presumption is here that use will be in the city but again the rationality of that presumption is not of constitutional moment in the six day inquiry and i should know that they've the feds have never taken the position i think in this case that three is a magic number or that three is a constitutional significance indeed if you've seen in the in the briefs you've seen that the original provision captured dreadful in all our counties the second version of the ruling did not have  geographic limit and then the current ruling has the three miles so i think there has not been an argument advanced by the city at least that the fact that it happens to be close in under this rule it is constitutionally significant i should also note facts they talked again about the first the first access case and i just remind the court again that a federal constitutional case i think it was being talked about in the course of the extraterritorial discussion this morning and again just important to maintain a strict were between those two breeds of analysis because they are there to do such different things and therefore the inquiries are so very different between finally  there was some discussion of mulligan and as we point out our library it's not only the case that we know from the briefing in that case that the livery was being made by the wholesaler into important again to return to first principles about the fact that there's a fact outside the borders doesn't change the fact this pertains to chicago's government affairs that's precisely the argument that this court in the appellate court has repeatedly get that was actually territory because it would happen indirectly of causing the county clerk to have to take longer to work up accounting for that that's enough to trigger the panel extraterritorial taxation clearly