Court Opinion

ID: 9517837
Source: CourtListenerOpinion
Date Created: 2023-08-07 00:34:31.533237+00
Date Added: 2024-06-11T12:17:41.252365
License: Public Domain

MR. JUSTICE GOLDENHERSH, dissenting: I dissent. I do not agree with the majority that the amendment to section 3 of the Use Tax Act (Ill. Rev. Stat. 1971, ch. 120, par. 439.3) effected by Public Act 77 — 1020 “was a codification of prior decisions of this court later summarized in Hagerty v. General Motors Corp., [59 Ill.2d 52,] relating to a retailer’s liability for collection of excessive tax charges” (63 Ill.2d at 346), or that payment to the Department served to defeat the purchasers’ claims for refund from the sellers of the excess use tax collected. Public Act 77 — 1020 amended section 3 of the Use Tax Act by adding the following provision: “If any seller collects use tax measured by receipts which are not subject to use tax, or if any seller, in collecting use tax measured by receipts which are subject to tax under this Act, collects more from the purchaser than the amount of the use tax on the transaction is, the purchaser shall have a legal right to claim a refund of such amount from the seller. However, if such amount is not refunded to the purchaser for any reason, the seller is liable to pay such amount to the Department. This paragraph does not apply to an amount collected by the seller as use tax on receipts which are subject to tax under this Act as long as such collection is made in compliance with the tax collection brackets prescribed by the Department in its Rules and Regulations.” Laws of 1971, at 1904-05; Ill. Rev. Stat. 1971, ch. 120, par. 439.3, effective August 17, 1971. This amendment in simple concise language gives a purchaser “a legal right to claim a refund” from a seller who has collected use tax in an amount greater than was due except when the overcharge occurs as the result of the “tax collection brackets prescribed by the Department ***.” The statute does not provide that payment to the Department of excess sums collected by the seller serves to bar the “legal right to claim a refund” specifically created by its terms. Hagerty is authority for the proposition “that in the absence of statute, taxes paid voluntarily, though erroneously, cannot be recovered.” (59 Ill.2d 52, 59.) Here, by reason of the amendment of section 3 of the Use Tax Act there is no “absence of statute,” but rather a presence of statute that expressly creates a “legal right to claim a refund” of excess taxes “voluntarily, though erroneously, paid.” An examination of the decisions “summarized in Hagerty” fails to reveal a basis for the majority’s holding. Harrison Sheet Steel Co. v. Lyons, 15 Ill.2d 532, permitted an action by a purchaser to prevent the unjust enrichment of a seller who had obtained a refund. In Snydermann v. Isaacs, 31 Ill.2d 192, following this court’s holding the tax invalid, a lessee sought to maintain an action to recover the tax paid to a lessor of personal property. The court held that under the general rule that “without legislative authorization voluntary tax payments can not be recovered” (31 Ill.2d 192, 196) the plaintiff had no statutory right to recover the taxes remitted by his lessor. In Crane Construction Co. v. Symons Clamp & Manufacturing Co., 25 Ill.2d 521, involving the same type of tax as Snyderman, the plaintiff sought to enjoin the defendant from paying over the tax unless such payment was made in compliance with the act relating to the payment of monies to the State under protest (Ill. Rev. Stat. 1961, ch. 127, par. 172) and to enjoin the State Treasurer from paying the monies thus collected into any fund other than the protest fund. The court held that “plaintiff has followed an appropriate method for litigating questions which it has a right to have determined.” (25 Ill.2d 521, 528.) Clearly the purpose of enacting the amendment embodied in Public Act 77 — 1020 was to provide the purchaser “a legal right to claim a refund” from the seller, and it is difficult to understand how this provision can be construed to be a “codification” of the foregoing decisions. The majority finds it significant that “The Department has not taken a position that the legislative amendment encompasses any situation not involving unjust enrichment to the retailer.” (63 Ill.2d 345.) In what manner the Department would become involved in determining whether payment of the excess tax bars an action by the purchaser against the seller, the majority, fails to explain. It is so obvious that the issue presented here is beyond the scope of the Department’s authority that no further comment is necessary. Had the General Assembly intended that the payment of the tax to the Department serve to defeat the purchaser’s “legal right to claim a refund” it would and could easily have so stated. The Use Tax Act provides the method by which defendants could have obtained refunds from the Department, and indeed, the record shows that claims for refund were in fact filed. The majority’s construction of the statute has effected a distortion of its provisions and by judicial legislation has added a bar to the purchaser’s “legal right to claim a refund. ” The majority has enumerated the prerequisites and inherent advantages of a class action (63 Ill.2d at 347), all of which are admittedly here present. The conclusion that this is, nevertheless, not properly a class action appears to be based on (1) the erroneous conelusion that despite the amendment effected by Public Act 77 — 1020 plaintiffs have no right to recover taxes erroneously but voluntarily paid, (2) some vague principle of fireside equity that, since only the State will be enriched unjustly, no harm is done, and peripherally (3) the conclusion, unsupported in the record, that the class is somehow unmanageable. The two cases cited for the first proposition are not in point, and no authority is cited for the other two, for the obvious reason, I submit, that there is none. This record shows beyond question that the defendants Jewel and Walgreen had collected and were holding $661,000 of taxes which except for these actions would probably have been retained in the corporate coffers. The cases presented a single legal and factual issue, not even contested by the defendants, and present a classic example of a situation where, absent a class action, the individuals who paid the excess taxes are denied relief. The circuit court is vested with power to determine classes and subclasses, and the only requirement for class membership is proof of having purchased cigarettes from the defendants during the period in question. Defendant Jewel issues identification cards to customers utilizing its check-cashing services (see Heidelberger v. Jewel Companies, Inc., 57 Ill.2d 87), and unquestionably there are other records of probative value such as defendant Walgreen’s prescription files. These are indicia of potential membership in a class or subclass, and the possibility that proof might be difficult is not a valid reason to summarily award the excess tax to the State.