Court Opinion

ID: 3142200
Source: CourtListenerOpinion
Date Created: 2015-10-22 17:55:49.89455+00
Date Added: 2024-06-11T12:06:52.441439
License: Public Domain

NO. 5-09-0079
                        N O T IC E

 Decision filed 04/02/10. The text of
                                                              IN THE
 this dec ision m ay b e changed or

 corrected prior to the              filing of a
                                                   APPELLATE COURT OF ILLINOIS
 P e t i ti o n   for     Re hea ring   or   the

 disposition of the same.
                             FIFTH DISTRICT
________________________________________________________________________

P&S GRAIN, LLC, an Illinois Limited          ) Appeal from the
Liability Company, and V.W. BOW MAN OIL ) Circuit Court of
COM PANY, a Missouri Corporation,            ) Williamson County.
                                             )
        Plaintiffs-Appellants,               )
                                             )
v.                                           ) No. 08-CH-100
                                             )
THE COUNTY OF WILLIAMSON,                    )
ILLINOIS, an Illinois Unit of Local          )
Government, BRIAN A. HAMER, Director,        )
Illinois Department of Revenue, an Agency of )
State Government, and THE BOARDS OF          )
EDUCATION OF JOHNSTON CITY,                  )
MARION, CRAB ORCHARD, HERRIN, and )
CARTERVILLE SCHOOL DISTRICTS,                ) Honorable
                                             ) John Speroni,
        Defendants-Appellees.                ) Judge, presiding.
__________________________________________________________________________

                  JUSTICE STEWART delivered the opinion of the court:

                  The plaintiffs, P&S Grain, LLC (P&S), and V.W. Bowman Oil Company (Bowman),

filed a complaint seeking a declaratory judgment, injunctive relief, and a temporary

restraining order. In their complaint, they challenge (1) the constitutionality of Public Act

95-0675 (Pub. Act 95-0675, eff. October 11, 2007), which, inter alia, added section 5-1006.7

to the Counties Code (55 ILCS 5/5-1006.7 (West Supp. 2007)) (section 5-1006.7 is entitled

the County School Facility Occupation Tax Law but is hereinafter referred to as the School

Facility Tax Law) and allows county governments to impose a 1% sales tax for school

facility use, (2) the validity of two Williamson County ordinances that authorized the

imposition of the 1% sales tax in Williamson County, and (3) the validity of the filing

certificate issued by the Illinois Department of Revenue in regard to one of the Williamson

                                                                1
County ordinances. The trial court determined that the plaintiffs did not have standing to

pursue this action, and the court granted the defendants' motion to dismiss. The sole issue

we resolve is whether the plaintiffs have standing to challenge the sales tax. We find that

both plaintiffs have standing, we reverse the order of the trial court dismissing the plaintiffs'

complaint, and we remand this case for further proceedings.

                                       BACKGROUND

       On October 11, 2007, the Illinois legislature enacted Public Act 95-0675, which, inter

alia, added the School Facility Tax Law and amended section 15 of the Local Government

Debt Reform Act. 55 ILCS 5/5-1006.7 (West Supp. 2007); 30 ILCS 350/15 (West Supp.

2007). In part, the School Facility Tax Law allows Illinois counties to impose a countywide

retailers' occupation tax and a service occupation tax (retail sales tax) at a rate of 1%, to be

used exclusively for school facility purposes. 55 ILCS 5/5-1006.7 (West Supp. 2007).

       In November 2007, pursuant to the School Facility Tax Law, the board of education

for each school district in Williamson County–Johnston City, Marion, Crab Orchard, Herrin,

and Carterville (hereinafter the school districts)–passed a similar resolution requesting that

Williamson County submit to the voters the question of imposing the 1% sales tax for school

facility purposes. On November 28, 2007, the Williamson County Board of Commissioners

(the Williamson County Board) passed resolution number 07-11-28-65, which authorized the

submission of the following proposition to be placed on the ballot for the February 5, 2008,

general primary election:

              "Shall the County of Williamson, Illinois, be authorized to impose a retailers

       occupation tax and a service occupation tax (commonly referred to as a 'sales tax') at

       a rate of 1% to be used exclusively for school facility purposes?"

At the general primary election held on February 5, 2008, the sales tax issue was submitted

to the voters of Williamson County. On February 19, 2008, Saundra Jent, the Williamson

                                               2
County clerk, certified, in an "Abstract of Votes," that the voters of Williamson County had

voted "yes" to the proposition submitted, by a margin of 9,078 to 8,342.

       On February 29, 2008, the Williamson County Board passed ordinance number 08-02-

29-02, which accepted the majority vote in favor of the imposition of the 1% school facility

tax and directed the Williamson County clerk to transmit a certified copy of the ordinance

to the Department of Revenue "for administration and enforcement." On March 28, 2008,

counsel for the Department of Revenue sent a letter to the Williamson County clerk

acknowledging its receipt of the copy of the ordinance and suggesting that the ordinance

should be amended to show an effective date of July 1, 2008, which would coincide with the

date the Department of Revenue would begin its administration and enforcement of the

ordinance. On April 8, 2008, the Williamson County Board passed ordinance number 08-04-

08-03 to impose the 1% school facility retail sales taxes in Williamson County, effective July

1, 2008.

       P&S filed the original complaint against Williamson County, Illinois, on May 20,

2008. On June 17, 2008, P&S sent a document entitled "Supreme Court Rule 19(a) Notice"

(210 Ill. 2d R. 19(a)) to Charles Garnati, Williamson County State's Attorney, and Steve

Green, the corporate counsel for the City of Marion, notifying them "that the within cause

of action challenges the constitutionality of Public Act 95-0675 as applied to Plaintiff." On

September 22, 2008, the trial court allowed Bowman to join the action as a plaintiff. On

September 26, 2008, the plaintiffs filed a seven-count amended complaint, adding the

Department of Revenue as a defendant as the "agent that collects and distributes" the 1%

retail sales taxes.

       In the amended complaint, the plaintiffs alleged that P&S is an Illinois limited liability

company with its primary office located in Marion, Illinois, that P&S is in the business of

selling agricultural products to customers located primarily in Williamson County, and that

                                               3
its sales are subject to retail sales taxes. The plaintiffs alleged that Bowman is a M issouri

corporation, authorized to do business in Illinois, and is in the business of selling petroleum

products to customers in Williamson County. The plaintiffs alleged that Bowman was also

subject to retail sales taxes. They alleged that they were taxpayers and tax collectors and that

they would suffer irreparable harm if the 1% retail sales taxes were allowed to be collected

and enforced.

       The plaintiffs alleged that Williamson County is a "non-home[-]rule unit of local

government" and that the City of Marion, Illinois (the City), "is a home[-]rule municipality

located within Williamson County, Illinois." They alleged that the five school districts

located in Williamson County had requested the county to place the question of imposing a

"County School Facility Occupations Tax" pursuant to the School Facility Tax Law (55 ILCS

5/5-1006.7(c) (West Supp. 2007)) on the February 5, 2008, ballot. The School Facility Tax

Law provides, in pertinent part, as follows:

                "(c) The tax under this Section may not be imposed until, by ordinance or

       resolution of the county board, the question of imposing the tax has been submitted

       to the electors of the county at a regular election and approved by a majority of the

       electors voting on the question. Upon a resolution by the county board or a resolution

       by school district boards that represent at least 51% of the student enrollment within

       the county, the county board must certify the question to the proper election authority

       in accordance with the Election Code.

                The election authority must submit the question in substantially the following

       form:

                       Shall (name of county) be authorized to impose a retailers' occupation

                tax and a service occupation tax (commonly referred to as a 'sales tax') at a rate

                of (insert rate) to be used exclusively for school facility purposes?

                                                4
       The election authority must record the votes as 'Yes' or 'No'.

                If a majority of the electors voting on the question vote in the affirmative, then

       the county may, thereafter, impose the tax." 55 ILCS 5/5-1006.7(c) (West Supp.

       2007).

       The plaintiffs alleged that the question of the imposition of the tax was ultimately

voted upon and approved by the voters of Williamson County and that the "Sales Tax

purportedly enacted by Williamson County will result in a de facto increase in sales taxes

throughout the City." The plaintiffs alleged that the City, through its home-rule powers, had

imposed certain taxes, that the City had the "sole and exclusive authority to impose sales

taxes within the City," and that neither the School Facility Tax Law nor any other legislative

act preempted the City's home-rule powers with regard to the imposition of retail sales taxes.

       Specifically, the plaintiffs alleged in count I, directed at Williamson County, that the

School Facility Tax Law, as applied within the City, was invalid and in violation of article

VII, section 6, of the Illinois Constitution (Ill. Const. 1970, art. VII, §6). In counts II and III,

which were directed at Williamson County, they alleged that Williamson County ordinance

numbers 08-02-29-02 and 08-04-08-03 were each "void ab initio." In count IV, which was

also directed at Williamson County, they alleged that the filing certificate issued by the

Department of Revenue was "without legal basis" and that the court should declare it void.

In counts V, VI, and VII, which were directed at both Williamson County and the

Department of Revenue, they sought injunctive relief against the collection of any tax under

the School Facility Tax Law, a declaratory judgment that the School Facility Tax Law and

the ordinances authorizing the tax were "void and of no legal force and effect," and a

temporary restraining order to prevent the Department of Revenue from collecting "the

disputed school sales tax sooner than January 1, 2009, if at all."

       On November 3, 2008, the school districts filed a petition to intervene as of right, and

                                                 5
on November 12, 2008, the trial court granted the plaintiffs' motion for an extension of time

to respond to that petition. Also on that date, the court found that the plaintiffs had a

"reasonable ground for filing" their cause of action and ordered the plaintiffs' amended

complaint to be filed and summons to issue.

       On November 13, 2008, the plaintiffs refiled the same amended complaint, the details

of which we have set forth above, against Williamson County and the Department of

Revenue. On November 19, 2008, the Department of Revenue was served with a summons.

On December 5, 2008, the trial court granted the school districts' petitions to intervene, and

on the same date, Williamson County and the school districts filed motions to dismiss,

challenging several aspects of the action, including the plaintiffs' standing to challenge the

statute and ordinances at issue.

       On December 17, 2008, the court conducted a hearing on the motions to dismiss. The

defendants argued that the plaintiffs failed to allege any actionable injury as a result of the

tax because, although they are required to pay the tax, they are allowed to pass the entire tax

on to the consumers. The defendants also argued that the plaintiffs, a limited liability

company and a Missouri corporation, did not meet the criteria for challenging the tax as set

forth in section 11-301 of the Code of Civil Procedure (the Code) (735 ILCS 5/11-301 (West

2008)). That section provides, "An action to restrain and enjoin the disbursement of public

funds by any officer or officers of the State government may be maintained either by the

Attorney General or by any citizen and taxpayer of the State." (Emphasis added.) 735 ILCS

5/11-301 (West 2008). The defendants argued that Bowman, a Missouri corporation, and

P&S, a limited liability company, did not qualify as citizens pursuant to the ruling in Charles

Friend & Co. v. Goldsmith & Seidel Co., 307 Ill. 45, 50, 138 N.E. 185, 187 (1923) ("A

corporation is not a citizen of any State or country"). The defendants asserted that only

individual taxpayers living in Williamson County are citizens who would have standing to

                                              6
challenge the tax under section 11-301 of the Code.

       The plaintiffs argued that they had standing to request injunctive relief on the ground

that, under section 11-301, they qualified both as citizens and as taxpayers. They argued that,

under the Business Corporation Act of 1983 (805 ILCS 5/1.01 et seq. (West 2008)), they had

the right to sue and be sued in their corporate name (805 ILCS 5/3.10 (West 2008)). They

argued that they had standing as taxpayers because, as retailers, they were required to pay the

1% school facility tax. They argued that they also had standing as tax collectors because they

were required to act as agents of the state in collecting the tax from their customers and

submitting the collected tax to the Department of Revenue. The plaintiffs maintained that

they suffered an actionable injury sufficient to give them standing whether or not they passed

the tax on to their customers and regardless of any reimbursement they might receive for

collecting the tax.

         On January 29, 2009, the court entered an order dismissing with prejudice the

amended complaint and ruling, in pertinent part, as follows:

              "Plaintiffs, P&S *** and *** Bowman ***, claim standing both as taxpayers

       and [as] tax collectors. The Plaintiffs do not have standing as taxpayers. 55 ILCS

       5/5-1006.7(a) and (b) specifically allow Plaintiffs to reimburse themselves for their

       sales tax liability by charging the sales taxes to their customers. In other words, the

       sales taxes are passed along to Plaintiffs' customers. In addition, the sales taxes apply

       only to goods and services subject to the sales taxes which are purchased in

       Williamson County. The sales taxes do not apply statewide or even in adjacent

       counties. The Plaintiffs, and anyone else for that matter, can avoid the sales taxes

       entirely by choosing not to purchase goods and services subject to the sales taxes in

       Williamson County.

              The Plaintiffs also do not have standing as tax collectors. As the Plaintiffs

                                               7
       concede[,] they are entitled to reimbursement for their expenses incurred in keeping

       records, preparing and filing returns, remitting the tax, [and] supplying data to the

       Department [of Revenue], if requested[,] and for acting as collectors of the tax.

              ***

              After considering the allegations of the Amended Complaint, the Motions to

       Dismiss, Plaintiffs' Memorandum Of Law In Opposition, the arguments of counsel[,]

       and the applicable law, the Court finds that the Plaintiffs *** do not have standing to

       bring this lawsuit. Accordingly, the Court finds that the Motions to Dismiss ***

       should be granted pursuant to 735 ILCS 5/2-619(a)(9), and this case should be

       dismissed, with prejudice."

       This appeal followed.

                                         ANALYSIS

       Because the trial court dismissed the plaintiffs' amended complaint for lack of

standing, our first task is to clearly delineate what is meant by standing and why it is a

necessary element of every cause of action. The concept of standing is related to the

concepts of mootness, ripeness, and justiciability, all of which allow courts to limit their

caseload to disputes which are truly adversarial and for which a judicial decision will resolve

the issues. Greer v. Illinois Housing Development Authority, 122 Ill. 2d 462, 488, 524
N.E.2d 561, 572 (1988). The primary criterion for standing is that a plaintiff must have

suffered an "injury in fact" for which a judicial decision may provide a redress or remedy.

Greer, 122 Ill. 2d at 488, 524 N.E.2d at 572-73. The " 'central principle' " of standing is

" 'very simple: One who is adversely affected in fact by governmental action has standing to

challenge its legality, and one who is not adversely affected in fact lacks standing.' "

(Emphasis in original.) Greer, 122 Ill. 2d at 488, 524 N.E.2d at 573 (quoting 4 K. Davis,

Administrative Law Treatise §24:2, at 212 (2d ed. 1983)).

                                              8
       The actual or threatened injury claimed by a plaintiff must be distinct and palpable,

fairly traceable to the defendant's actions, and substantially likely to be prevented or

redressed by the grant of the requested relief. Greer, 122 Ill. 2d at 492-93, 524 N.E.2d at

575. "In the context of an action for declaratory relief, there must be an actual controversy

between adverse parties, with the party requesting the declaration possessing some personal

claim, status, or right which is capable of being affected by the grant of such relief." Greer,
122 Ill. 2d at 493, 524 N.E.2d at 575.

       For there to be an "actual" controversy, there must be "a showing that the underlying

facts and issues" are not moot or premature because courts are not to render advisory

opinions or merely provide legal advice about possible future events. Messenger v. Edgar,

157 Ill. 2d 162, 170, 623 N.E.2d 310, 314 (1993). "The requirement of an actual controversy

is meant only to distinguish justiciable issues from abstract or hypothetical disputes and is

not intended to prevent the resolution of concrete disputes in which a definitive and

immediate determination of the rights of the parties is possible." Messenger, 157 Ill. 2d at

170-71, 623 N.E.2d at 314. For the plaintiff to be "interested" in the controversy, there must

be more than mere curiosity or concern; "rather, the party requesting the declaration must

possess a personal claim, status, or right that is capable of being affected by the grant of such

relief." Messenger, 157 Ill. 2d at 171, 623 N.E.2d at 314.

       "Since standing is a component of justiciability, it must be defined on a case-by-case

basis." Messenger, 157 Ill. 2d at 171, 623 N.E.2d at 314. Whether a party has standing

differs depending upon the issues involved and the nature of the relief sought. Martini v.

Netsch, 272 Ill. App. 3d 693, 695, 650 N.E.2d 668, 670 (1995). "Whether the plaintiff has

standing to sue is to be determined from the allegations contained in the complaint." Martini,
272 Ill. App. 3d at 695, 650 N.E.2d at 670.

       In our case, the trial court dismissed the plaintiffs' complaint upon the defendants'

                                               9
motion to dismiss filed pursuant to section 2-619 of the Code (735 ILCS 5/2-619 (West

2008)), which allows claims to be dismissed based upon certain defects or defenses (Illinois

Graphics Co. v. Nickum, 159 Ill. 2d 469, 485-86, 639 N.E.2d 1282, 1290 (1994)).

Specifically, a claim may be dismissed when it is "barred by other affirmative matter

avoiding the legal effect of or defeating the claim." 735 ILCS 5/2-619(a)(9) (West 2008).

A lack of standing qualifies as such an affirmative matter. Wexler v. Wirtz Corp., 211 Ill. 2d
18, 22, 809 N.E.2d 1240, 1243 (2004). There is no requirement for a plaintiff to assert facts

to show that he has standing; rather, it is the burden of the defendant to plead and prove a

lack of standing. Wexler, 211 Ill. 2d at 22, 809 N.E.2d at 1243. "When ruling on a section

2-619 argument, a court must accept as true all well-pled facts in the plaintiff's complaint and

all inferences that reasonably can be drawn in the plaintiff's favor." Crusius v. Illinois

Gaming Board, 348 Ill. App. 3d 44, 48, 807 N.E.2d 1207, 1212 (2004), aff'd, 216 Ill. 2d 315,

837 N.E.2d 88 (2005). A motion to dismiss filed pursuant to section 2-619 that challenges

a plaintiff's standing presents a question of law, and our review of the trial court's ruling is

de novo. Wexler, 211 Ill. 2d at 23, 809 N.E.2d at 1243.

       With these rules in mind, we first consider whether the plaintiffs, as taxpayers, meet

the common law requirements for standing to challenge the imposition of the 1% school

facilities retail sales tax in Williamson County. The basic premises of their cause of action

are (1) that Williamson County's imposition of the school facility tax conflicts with and

unconstitutionally violates the City's home-rule status and its imposition of citywide taxes

and (2) that Williamson County did not correctly follow the necessary procedures for

implementing the tax. Without commenting upon the viability of their claim, we find that

the plaintiffs, as corporate entities subject to both the City's taxes and Williamson County's

school facility tax, are adversely affected by those taxes. Since both plaintiffs, as retailers,

are subject to the tax they are challenging, they have a real interest in the outcome of the

                                              10
lawsuit, which is a truly adversarial controversy. See Crusius, 348 Ill. App. 3d at 48, 807

N.E.2d at 1212 ("The doctrine of standing ensures that the person pursuing the action has a

real interest in the outcome of the controversy"); Greer, 122 Ill. 2d at 488, 524 N.E.2d at 572

(the doctrine of standing limits judicial consideration to those controversies that are "truly

adversarial").

       Under the well-established test for standing, we find that the plaintiffs' claim of injury

is distinct and palpable, in that it is based upon the imposition of a particular tax and is not

vague or undefined. Their claim of injury is fairly traceable to the defendants' actions, in that

it is the school districts that initially requested the tax to be implemented, it is the Williamson

County Board that passed the ordinances and completed the procedures that resulted in the

implementation of the tax, and it is the Department of Revenue that is charged with the

collection and enforcement of the tax. Finally, their claim of injury is "substantially likely

to be prevented or redressed by the grant of the relief requested." Greer, 122 Ill. 2d at 493,

524 N.E.2d at 575. The plaintiffs have alleged that the tax is unconstitutional and was

improperly imposed. They request declaratory and injunctive relief, the ultimate aim of

which is to enjoin collection of the tax. If the collection of the tax is enjoined, they will no

longer be subject to it.

        We emphasize that this decision is limited to the issue of the plaintiffs' standing; we

are not making any ruling or comments about the ultimate outcome of the lawsuit. In ruling

on the issue of standing, however, we are required to consider the allegations of the plaintiffs'

amended complaint as true for the purpose of our decision. Crusius, 348 Ill. App. 3d at 48,

807 N.E.2d at 1212. Therefore, if the relief the plaintiffs request is granted, then the injury

they claim will have been prevented or redressed, as is required for them to have standing.

Thus, they meet the most basic requirements for standing.

       The trial court ruled that the plaintiffs do not have standing to bring this action as

                                                11
taxpayers for the following reason: "[The School Facility Tax Law] specifically allow[s]

Plaintiffs to reimburse themselves for their sales tax liability by charging the sales taxes to

their customers. In other words, the sales taxes are passed along to Plaintiffs' customers."

That reasoning is flawed. The tax imposed is a tax on the occupation of being a retailer, and

must be paid by the retailer, whether or not it is passed along to consumers. The Illinois

Supreme Court has squarely rejected the trial court's reasoning:

       "Illinois retailers are liable for taxes under the Retailers' Occupation Tax Act [(Ill.

       Rev. Stat. 1985, ch. 120, par. 440 et seq.)] whether they have successfully collected

       use taxes from their customers or not. Moreover, as we have stated, 'The retailers'

       occupation tax is levied upon the seller, and the custom of passing the burden to the

       buyer by means of a price increase does not alter its nature. It is the legal incidence

       of the tax that controls.' " Springfield Rare Coin Galleries, Inc. v. Johnson, 115 Ill.
2d 221, 229, 503 N.E.2d 300, 304 (1986) (quoting National Bank of Hyde Park in

       Chicago v. Isaacs, 27 Ill. 2d 205, 207, 188 N.E.2d 704, 705 (1963)).

In Springfield Rare Coin Galleries, Inc., the Illinois Supreme Court determined that the

plaintiff corporation had standing as a taxpayer to challenge the imposition of a provision of

the Retailers' Occupation Tax Act. Springfield Rare Coin Galleries, Inc., 115 Ill. 2d at 231,
503 N.E.2d at 304. Similarly, in the case at bar, although P&S and Bowman have the right

to pass the tax along to their customers, that right does not defeat their standing to challenge

the imposition of the tax because the school facility tax is to be construed the same as the

retail sales tax at issue in Springfield Rare Coin Galleries, Inc.

       The School Facility Tax Law provides that the school facilities tax is to be treated the

same as it would be under the Retailers' Occupation Tax Act (35 ILCS 120/1 et seq. (West

2006)) by providing as follows:

              "In the administration of and compliance with this subsection, the Department

                                              12
       and persons who are subject to this subsection (i) have the same rights, remedies,

       privileges, immunities, powers, and duties, (ii) are subject to the same conditions,

       restrictions, limitations, penalties, and definitions of terms, and (iii) shall employ the

       same modes of procedure as are set forth in [the applicable] Sections *** of the

       Retailers' Occupation Tax Act and all provisions of the Uniform Penalty and Interest

       Act as if those provisions were set forth in this subsection." 55 ILCS 5/5-1006.7(a)

       (West Supp. 2007).

Therefore, since the supreme court has ruled that a corporation has standing to challenge

retail sales taxes even though it might have passed that tax along to its customers, the

corporate plaintiffs in this case do not lack standing simply because they may pass the school

facility tax along to their customers.

       The defendants nevertheless argue that the trial court correctly ruled that the plaintiffs

do not have standing because they may pass the tax along to their customers, and in support

of that argument they cite the Illinois Supreme Court's decision in Raintree Homes, Inc. v.

Village of Long Grove, 209 Ill. 2d 248, 807 N.E.2d 439 (2004). We disagree. In Raintree

Homes, Inc., the supreme court considered whether building permit applicants had standing

to challenge the imposition of impact fees, which were required to be paid by each building

permit applicant. Raintree Homes, Inc., 209 Ill. 2d at 251-52, 807 N.E.2d at 441-42. The

supreme court ruled that the plaintiffs did not have standing to challenge the fees because the

landowners, not the plaintiffs/building permit applicants, had actually paid those fees.

Raintree Homes, Inc., 209 Ill. 2d at 262, 807 N.E.2d at 447-48.

       There are significant differences between the facts of the Raintree Homes, Inc. case

and ours. There, the plaintiffs had no interest in the controversy because it was undisputed

that they had not paid the challenged fees. Raintree Homes, Inc., 209 Ill. 2d at 261-62, 807

N.E.2d at 447-48. In the case at bar, the defendants have argued only that the plaintiffs have

                                              13
a right to pass the tax along, not that they have actually done so.

       The most important difference, however, is that the nature of impact fees is different

from the nature of retail sales taxes. In Raintree Homes, Inc., the supreme court noted that

impact fees are not taxes, although there are similarities. Raintree Homes, Inc., 209 Ill. 2d

at 259, 807 N.E.2d at 446. Taxes imposed under the Retailers' Occupation Tax Act are not

taxes upon the privilege of buying, or upon individual sales, but upon the occupation of

retailer. See Central Television Service, Inc. v. Isaacs, 27 Ill. 2d 420, 426-27, 189 N.E.2d
333, 336 (1963) (and cases cited therein). Likewise, taxes imposed under the School Facility

Tax Law are also specifically imposed "upon all persons engaged in the business of selling

tangible personal property." 55 ILCS 5/5-1006.7(a) (W est Supp. 2007).

       In contrast, the impact fees imposed in Raintree Homes, Inc. were fees imposed as a

condition of the issuance of a particular building permit for the construction of a specific

dwelling unit. Raintree Homes, Inc., 209 Ill. 2d at 252, 807 N.E.2d at 442. Since the fees

in that case were specific to the transaction, the only parties with a real interest in the

controversy were the ones that actually paid the fees. In our case, since the tax is upon the

occupation of retailer, it is the retailer that has the real interest in the controversy. Hence, the

plaintiffs in our case, which are retailers, are the real parties in interest, and the ruling in

Raintree Homes, Inc. does not apply to the facts of this case.

       The trial court also determined that the plaintiffs did not have standing as tax

collectors to challenge this tax because they have the right to be reimbursed for their

expenditures in collecting the tax. That reasoning is also faulty. Since the tax is upon the

plaintiffs due to their status as retail sellers, it is the imposition of the tax that gives them

standing, and any procedures by which they may recover their costs for collecting it do not

negate the effect of the tax upon them. Since the supreme court has determined that the

ability to directly pass the tax along to one's customers does not defeat standing, it is not

                                                14
reasonable to find that the ability to recover the incidental cost of the procedures required to

collect the tax defeats standing. See Springfield Rare Coin Galleries, Inc., 115 Ill. 2d at 229,
503 N.E.2d at 304.

       We next consider the defendants' argument that the plaintiffs do not have standing

under section 11-301 because they are not "citizens." 735 ILCS 5/11-301 (West 2008). The

plaintiffs assert standing under section 11-301, as well as under common law principles of

standing, because, by their amended complaint, they seek to restrain and enjoin the

disbursement of public funds collected from retailers in Williamson C ounty. See City of

Carbondale v. Bower, 332 Ill. App. 3d 928, 932, 773 N.E.2d 182, 185 (2002) (in order to file

an action under section 11-301, the plaintiff must be a citizen and taxpayer and the complaint

must be an action to restrain and enjoin the disbursement of public funds). The defendants

argue that because the plaintiffs "are corporate entities, they do not qualify as citizens who

are authorized to bring this type of action." They specifically argued in the trial court and

in oral argument before this court that only an individual citizen, and not a corporate entity

such as either plaintiff, can ever qualify as a "citizen and taxpayer" under section 11-301.

This argument is without merit.

       Corporate entities such as these plaintiffs qualify as corporate citizens with rights and

responsibilities very similar to those of individual citizens. See Bird v. Luhr Brothers, Inc.,

334 Ill. App. 3d 1088, 1090, 779 N.E.2d 907, 911 (2002) (an Illinois corporate defendant in

a forum non conveniens case was referred to as a "corporate citizen"); People ex rel. Scott

v. Dravo Corp., 10 Ill. App. 3d 944, 947, 295 N.E.2d 284, 287 (1973) (in a suit by the State

of Illinois against one Illinois corporation and two out-of-state corporations, the court

characterized the action as one "between a State and its corporate citizens"); 805 ILCS

5/3.10(b) (West 2008) (each corporation shall have power to sue and be sued, and complain

and defend, in its corporate name).

                                              15
       The defendants argue that a 1923 Illinois Supreme Court case controls the issue of the

standing of the plaintiffs under section 11-301. We disagree. In Charles Friend & Co. v.

Goldsmith & Seidel Co., 307 Ill. 45, 48, 138 N.E. 185, 186 (1923), the supreme court

considered the dismissal of an attachment suit in which the issue on appeal was "whether a

foreign corporation doing business in this State under the license authorized by law is subject

to attachment as a non[]resident." As a part of the discussion of that issue, the supreme court

noted that a corporate entity may be considered a person but not a citizen. Charles Friend

& Co., 307 Ill. at 50, 138 N.E. at 187. However, that discussion in Charles Friend & Co.

does not apply to the issue of standing under section 11-301. Later cases have limited the

scope of the Charles Friend & Co. case to the particular statute at issue therein. See LeBlanc

v. G.D . Searle & Co., 178 Ill. App. 3d 236, 240, 533 N.E.2d 41, 43 (1988) (the Charles

Friend & Co. case was only decided "in light of the purpose of [the attachment] statute").

Since the court in Charles Friend & Co. did not consider the question presented in our case,

whether a corporate entity qualifies as a "citizen" under section 11-301, its ruling is irrelevant

to our decision.

       We have found nothing in the legislative history of section 11-301 to support the

defendants' argument that the use of the term "citizen" precludes corporate entities from

filing actions under that section. It is likely that there is no such legislative history because

the legislature never questioned whether corporations would be precluded from filing actions

under section 11-301. Clearly, there is no rational basis for interpreting the statute to allow

an individual taxpayer to file a lawsuit to restrain and enjoin the disbursement of public funds

but to preclude a corporate taxpayer from doing so. Consider two retailers located in the

same town, selling the same products. One retailer is incorporated and the other is not. Both

are equally subject to the payment of retailers' occupation taxes. Under the defendants'

analysis, the individual retailer would have standing to challenge a sales tax under section

                                               16
11-301, but the incorporated retailer would not. Such a result defies logic.

       We note that the analysis is no different for Bowman than for P&S, even though

Bowman is a Missouri corporation. "A foreign corporation, by seeking and obtaining

authority to transact business in Illinois[,] does not preclude itself from objecting to the

enforcement of statutes which conflict with the Federal or State constitutions ***." People

ex rel. Holland v. Bleigh Construction Co., 61 Ill. 2d 258, 260-61, 335 N.E.2d 469, 472

(1975) (where the defendant, a Missouri corporation, sought to challenge the constitutionality

of a statute, the supreme court held that the defendant "obviously" had "standing to challenge

the validity of the statute upon which the action against it" was based); see also St. Louis

Southwestern Ry. Co. v. Stratton, 353 Ill. 273, 278, 187 N.E. 498, 500 (1933) (ruling that

once a foreign corporation follows the applicable procedures to obtain the right to do

business in Illinois, it is equal to and should be classified the same as similar domestic

corporations).

       Finally, we address the defendants' argument that the plaintiffs waived their

constitutional challenge to the School Facility Tax Law "when they failed to provide notice

of the challenge to the proper parties." 1 The defendants claim that the plaintiffs were

required to serve notice of the lawsuit upon the Illinois Attorney General when they filed this

lawsuit. The defendants base their arguments upon Supreme Court Rule 19(a), which

provides, in relevant part, as follows:

                 "In any cause or proceeding in which the constitutionality *** of a statute ***

       affecting the public interest is raised, and to which action or proceeding the State or

       the political subdivision, agency, or officer affected is not already a party, the litigant

       raising the constitutional *** issue shall serve an appropriate notice thereof on the

       1
           The plaintiffs filed a motion in this court requesting that we strike this issue from the

defendants' brief. We deny that motion.

                                                  17
       Attorney General, State's Attorney, municipal counsel[,] or agency attorney, as the

       case may be." (Emphasis added.) 210 Ill. 2d R. 19(a).

       The defendants acknowledge that the plaintiffs served a Rule 19(a) notice on June 17,

2008, within a month of the initial filing of their complaint. However, they complain that the

notice was not served simultaneously with the initial complaint and that it was served on the

Williamson County State's Attorney and the City's corporate counsel, rather than upon the

Attorney General's office. They argue that the plaintiffs have therefore waived any challenge

to the constitutionality of the tax and "should not be allowed to appeal to this Court." We

disagree.    Two of the cases the defendants cite in support of this argument are

distinguishable. In both cases, the plaintiffs failed to raise the constitutional challenge in the

trial court, and the courts found the issues waived on that basis, also noting that the plaintiffs

had failed to comply with Rule 19. Villareal v. Peebles, 299 Ill. App. 3d 556, 560, 701
N.E.2d 145, 147 (1998); Witt v. Jones & Jones Law Offices, P.C., 269 Ill. App. 3d 540, 545,

646 N.E.2d 23, 26 (1995). Those cases are not applicable to our case, where the plaintiffs

squarely raised the constitutional issues in their initial complaint and served a Rule 19 notice

upon the State's Attorney and corporate counsel less than one month later.

       Moreover, the Department of Revenue, the state agency charged with overseeing and

collecting the tax, has been made a party to this lawsuit and has been served with a summons.

Under Rule 19, the notice must be served unless the State or agency "affected is not already

a party." 210 Ill. 2d R. 19(a). Here, the agency affected, the Department of Revenue, has

been made a party defendant prior to any resolution on the merits of the constitutional issues

raised. "The purpose of the notice is to give the affected agency or officer the opportunity

to intervene in the proceeding for the purpose of defending the constitutionality of the statute,

ordinance, or administrative regulation." Village of Lake Villa v. Stokovich, 211 Ill. 2d 106,

115, 810 N.E.2d 13, 20 (2004). Here, the issue of the constitutionality of the statute has yet

                                               18
to be determined. The purpose of the rule has been accomplished. The defendants' argument

fails.

                                        CONCLUSION

         For all the reasons stated, we reverse the trial court's order granting the defendants'

motion to dismiss, and we remand for further proceedings consistent with this opinion.

         Reversed; cause remanded.

         GOLDENHERSH, P.J., and CHAPMAN, J., concur.

                                               19
                                          NO. 5-09-0079

                                              IN THE

                               APPELLATE COURT OF ILLINOIS

                                  FIFTH DISTRICT
___________________________________________________________________________________

      P&S GRAIN, LLC, an Illinois Limited          ) Appeal from the
      Liability Company, and V.W. BOW MAN OIL ) Circuit Court of
      COM PANY, a Missouri Corporation,            ) Williamson County.
                                                   )
              Plaintiffs-Appellants,               )
                                                   )
      v.                                           ) No. 08-CH-100
                                                   )
      THE COUNTY OF WILLIAMSON,                    )
      ILLINOIS, an Illinois Unit of Local          )
      Government, BRIAN A. HAMER, Director,        )
      Illinois Department of Revenue, an Agency of )
      State Government, and THE BOARDS OF          )
      EDUCATION OF JOHNSTON CITY,                  )
      MARION, CRAB ORCHARD, HERRIN, and )
      CARTERVILLE SCHOOL DISTRICTS,                ) Honorable
                                                   ) John Speroni,
              Defendants-Appellees.                ) Judge, presiding.
___________________________________________________________________________________

Opinion Filed:        April 2, 2010
___________________________________________________________________________________

Justices:          Honorable Bruce D. Stewart, J.

                 Honorable Richard P. Goldenhersh, P.J., and
                 Honorable Melissa A. Chapman, J.,
                 Concur
___________________________________________________________________________________

Attorney         Ronald E. Osman, Ronald E. Osman & Associates, Ltd., 1602 W. Kimmel, P.O.
for              Box 939, Marion, IL 62959
Appellants
___________________________________________________________________________________

Attorneys          Merry C. Rhoades, Daniel J. Rhoads, Tueth, Keeney, Cooper, Mohan & Jackstadt,
for                PC, 101 W. Vandalia, Suite 210, Edwardsville, IL 62025 (for The Boards of Education
Appellees          of Johnston City, Marion, Crab Orchard, Herrin, and Carterville School Districts)

                 Stephen E. Norris, Deputy Director, Sharon Shanahan, Staff Attorney, State's
                 Attorneys Appellate Prosecutor, 730 E. Illinois Highway, Suite 2, P.O. Box 2249,
                 Mt. Vernon, IL 62864 (NO BRIEF FILED -- for The County of Williamson, Illinois)
___________________________________________________________________________________