Court Opinion

ID: 9722471
Source: CourtListenerOpinion
Date Created: 2023-08-26 09:34:49.172872+00
Date Added: 2024-06-11T18:24:35.963830
License: Public Domain

JUSTICE WEXSTTEN,1  dissenting: The Department of Revenue’s interpretation of the Act is too restrictive and is contrary to precedent. See Granite City Steel Co. v. Department of Revenue, 30 Ill. 2d 552 (1964) (the Department properly excluded from its use tax assessment the amount of coke, converted from coal and used to supply heat necessary to produce pig iron, that became an ingredient of the finished pig iron that was subsequently sold); Columbia Quarry Co. v. Department of Revenue, 40 Ill. 2d 47 (1968) (the portion of limestone, used by the steel company to “flux off” impurities, that was not completely consumed but became a constituent of slag that was resold was exempt from the retailers’ occupation tax). Although the production of electricity does not constitute manufacturing (Farrand Coal Co. v. Halpin, 10 Ill. 2d 507, 513 (1957)), no precedent precludes EEI from acting as an electric company and a manufacturer for purposes of the Act. There is a process occurring while the coal is burned for electricity, a manufacturing process that results in type C specification fly ash that is subsequently resold. As a result, that portion of coal not completely consumed but which became an ingredient of the type C specification fly ash subsequently resold is exempt from taxation as personal property “resold as an ingredient of an intentionally produced product or by-product of manufacturing.” 35 ILCS 105/2 (West 2004); see also American Distilling Co. v. Department of Revenue, 53 Ill. App. 3d 42 (1977); Armour Pharmaceutical Co. v. Department of Revenue, 321 Ill. App. 3d 662 (2001). For the foregoing reasons, I respectfully dissent.   1 Justice Hopkins participated in oral argument. Justice Wexstten was later substituted on the panel and has read the briefs and listened to the audiotape of oral argument.