Court Opinion

ID: 9525475
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:04:05.908177+00
Date Added: 2024-06-11T13:14:57.836749
License: Public Domain

MR. JUSTICE KLUCZYNSKI, concurring in part and dissenting in part: I concur with the majority opinion that the passage of Public Act 79 — 1185 authorizes the tax the plaintiff seeks to levy against the defendants. I must dissent, however, to the majority’s determination that the admissions tax ordinance was a valid exercise of home rule taxing powers, and that it did not constitute an impermissible tax upon occupations, prior to the effective date of that act. I agree with the concurring opinion that the tax ordinance is a tax upon occupations, but I do not agree with the determination that the tax is one the General Assembly has “by law” authorized under the Municipal Code. Section 6(a) of article VII of the 1970 Constitution provides in part: “(a) *** Except as limited by this Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs including *** the power *** to tax ***.” (Emphasis added.) In Ampersand, Inc. v. Finley, 61 Ill. 2d 537, 539-40, this court noted that “[t] he terms of [section 6(a)] are broad and imprecise and were purposely left without definition. [Citations.] It was the intention of the constitutional convention to refrain from writing into the Constitution what has been referred to as a ‘laundry list’ setting forth all areas to be designated as of statewide concern or all areas to be designated as being of local concern. *** It was acknowledged in the constitutional debates that by virtue of the general language of the grant and the qualifying phrase ‘pertaining to its government and affairs’ the right of a home rule unit to exercise any power will ultimately depend upon an interpretation by this court as to whether or not the power exercised is within the grant of section 6(a). [Citation.] ” In explaining the intended limitation of this section, the local government committee stated in its report to the constitutional convention: “It is clear, however, that the powers of home-rule units relate to their own problems, not to those of the state or the nation. Their powers should not extend to such matters as divorce, real property law, trusts, contracts, etc. which are generally recognized as falling within the competence of state rather than local authorities.” (7 Record of Proceedings, Sixth Illinois Constitutional Convention 1621.) To further aid in understanding this limitation, the committee set forth several examples of what are and what are not considered valid home rule powers. One pertinent example was: “Home-Rule City adopts an ordinance limiting the rates that may be charged by the telephone company for local calls. Long standing state regulation of utility rates precludes this subject from being considered a matter pertaining to home-rule government and affairs.” 7 Proceedings 1652. I find the admissions tax ordinance, as applied to the horse racing industry, analogous to the above-quoted example. As this court stated in People ex rel. Scott v. Chicago Thoroughbred Enterprises, Inc., 56 Ill. 2d 210, 216, and People ex rel. Scott v. Illinois Racing Board, 54 Ill. 2d 569, 576, “A primary legislative purpose in the regulation of horse racing is the generation of income for the State.” It was further observed in Illinois Racing Board that “[b] oth [the Horse Racing and the Harness Racing] Acts are part of a comprehensive statutory plan for the regulation of the horse racing industry in Illinois.” (54 Ill. 2d 569, 577.) Under those acts, no governmental body, other than the State, possesses the authority to issue a racing license or to impose any other type of direct control over racing. The long-standing State regulation of horse racing, starting in 1927 (Cahill’s Ill. Rev. Stat. 1927, ch. 38, par. 316(1) et seq.), and the dominant interest the State has in the revenue derived from this industry, precludes it from being considered a subject pertaining to the government and affairs of Cicero. The majority opinion attempts to distinguish the present case by recognizing the “hybrid character” of horse racing as both an industry and an amusement. It notes, in regard to the former, that it is heavily regulated by the State, and, in regard to the latter, that it is an activity carried on within the corporate boundaries of Cicero. Based on this distinction, the opinion concludes that plaintiff may levy its admissions tax. I do not find this distinction controlling. The majority opinion, in effect, recognizes in horse racing both a State and a local interest. The existence of some local interest, however, does not provide authority for intrusions of home rule powers into areas of dominant State interest, such as here, or into areas which are generally recognized as falling within the competence of State authorities. In City of Des Plaines v. Chicago and North Western Ry. Co., 65 Ill. 2d 1, which involved the question of a home rule municipality’s power to regulate noise pollution, this court recognized the local interest in the regulation of noise pollution emissions, but found that it was a matter recognized as falling within the competence of State authorities. The reasoning expressed by this court in determining that the regulation of noise pollution is not a matter pertaining to the government and affairs of a home rule municipality is equally applicable and valid to the present case, and should be controlling. In pertinent part, section 6(e)(2) of article VII provides: “(e) A home rule unit shall have only the power that the General Assembly may provide by law *** (2) to license for revenue or impose taxes upon or measured by income or earnings or upon occupations.” “[A] n occupation tax has one of two missions: either to regulate and control a given business or occupation, or to impose a tax for the privilege of exercising, undertaking or operating a given occupation, trade or profession.” (Reif v. Barrett, 355 Ill. 104, 109.) Throughout its brief, plaintiff has asserted that the admissions tax is a tax imposed for the privilege of conducting an “amusement” in Cicero. Even without plaintiff’s statement, it is clear that the tax comes within the court’s definition of a tax upon occupations. Plaintiff, however, vigorously attempts to distinguish its tax by pointing out that it applies to “all amusements” and is not imposed upon a “given occupation.” Such a distinction is without merit. While the licensees of this tax may be involved in such various activities as presenting horse racing meetings or theatrical performances or athletic contests, they are all engaged in the general occupation of furnishing amusements to the public, and are subject to the admissions tax because of that occupation. Plaintiff’s contention that the tax embraces amusements which are not occupations in the traditional sense, such as a poultry show, animal act or flower show, is equally without merit. It is not the show or the act which is liable for the tax, but rather the person or corporation presenting the amusement. Notably, in the present action, plaintiff did not seek a monetary judgment against a harness racing meeting, but against the corporation which conducted the meeting. Plaintiff argues that the admissions tax ordinance does not impose an occupation tax because the “true incidence” of the tax falls upon the patrons of the particular amusement. In support of this position, it points to the provision in section 5 — 35 of the ordinance which specifically permits the licensees to collect the amount of the tax from the ticket holders. Plaintiff’s reasoning, however, is contrary to this court’s previous decisions in National Bank of Hyde Park v. Isaacs, 27 Ill. 2d 205, 207, and First National Bank of Maywood v. Jones, 48 Ill. 2d 282, 288, wherein we stated that “the custom of passing the [tax] 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.” See also S. Bloom, Inc. v. Korshak, 52 Ill. 2d 56, 63. The admissions tax ordinance placed the legal incidence of the tax upon the licensees, and whether or not, as a practical matter, the economic burden is shifted to the patrons, as the ordinance would permit, is not controlling. The ordinance is unlike the cigarette tax ordinance considered in S. Bloom, Inc. v. Korshak, 52 Ill. 2d 56, or the liquor tax ordinance in Mulligan v. Dunne, 61 Ill. 2d 544. The tax ordinances challenged in those cases specifically provided, unlike the present ordinance, that the burden of the tax was to be borne by the consumer. Since the legal incidence of the tax was clearly placed upon the consumers, the respective ordinances did not impose a tax upon occupations. Plaintiff argues that it possesses authority to impose the admissions tax under section 11 — 42—5 of the Illinois Municipal Code (Ill. Rev. Stat. 1973, ch. 24, par. 11—42—5) and section 9 of the Transition Schedule of the 1970 Constitution. Section 11 — 42—5, which was in effect at the time the admissions tax ordinance was enacted, provides: “The corporate authorities of each municipality may license, tax *** theatricals and other exhibitions, shows, and amusements and may license, tax, and regulate all places for *** amusement.” Section 9 of the Transition Schedule states, in pertinent part: “All laws, ordinances, regulations and rules of court not contrary to, or inconsistent with, the provisions of this Constitution shall remain in force, until they shall expire by their own limitation or shall be altered or repealed pursuant to this Constitution.” Plaintiff reasons that since local municipalities have long held the power to tax amusements under section 11 — 42—5 and this statutory authority is not contrary to the 1970 Constitution, section 9 of the Transition Schedule provides that the statute remains in force. The concurring opinion concludes that, although the admissions tax ordinance is a tax upon occupations, it is valid, because the General Assembly has “by law” authorized municipalities to impose such under section 11 — 42—5 of the Municipal Code. The words “by law” are, apparently, a reference to section 6(e) of article VII, which states: “A home rule unit shall have only the power that the General Assembly may provide by law *** (2) to *** impose taxes *** upon occupations.” Section 11 — 42—5, however, was enacted by the General Assembly prior to the 1970 Constitution (see Laws of 1961, at 576), and it cannot provide the legislative authorization required by section 6(e) to overcome the constitutional prohibition contained in that section. Section 11 — 42—5 of the Municipal Code cannot remain in force under the provisions of section 9 of the Transition Schedule, because it is contrary to the specific prohibition of section 6(e)(2), which precludes home rule municipalities from imposing a tax upon occupations. The question of whether non-home-rule municipalities may impose such a tax under section 11 — 42—5 is not an issue in the appeal. Accordingly, for the above-stated reasons, I would hold that prior to the General Assembly’s authorization in Public Act 79 — 1185 the admissions tax ordinance was an invalid exercise of home rule powers.