American Optical Co. v. Nudelman

• Decision Date: 20 February 1939
• Docket Number: No. 24996.,24996.
• Citation: 19 N.E.2d 582,370 Ill. 627
• Parties: AMERICAN OPTICAL CO. et al. v. NUDELMAN, Director of Finance, et al.
• Court: Illinois Supreme Court

370 Ill. 627

19 N.E.2d 582

AMERICAN OPTICAL CO. et al.

v.NUDELMAN, Director of Finance, et al.

No. 24996.

Supreme Court of Illinois.

Feb. 20, 1939.

Suit by the American Optical Company and others against Sam L. Nudelman, Director of Finance, and others to restrain the collection of retailers' occupation tax. From an adverse decree, defendants appeal.

Affirmed.Appeal from Circuit Court, Sangamon County; Lawrence E. stone, judge.

John E. Cassidy, Atty. Gen. (Montgomery S. Winning and Martin Philipsborn, Jr., both of Springfield, of counsel), for appellants.

Taylor, Miller, Busch & Boyden, and Maurice S. Weinzelbaum, all of Chicago, and Provine & Williams, of Taylorville (James J. Magner and Charles R. Sprowl, both of Chicago, of counsel), for appellees.

ORR, Justice.

The question presented is whether wholesale opticians who manufacture and deliver optical supplies upon prescriptions and orders from optometrists and occlists, are required to pay the Retailers' Occupation tax upon such sales. The question arises upon the complaint of the American Optical Company and sixteen other plaintiffs who secured a permanent injunction in the circuit court of Sangamon county against the Director of Finance and the State Treasurer restraining the collection of such taxes. The plaintiffs were also allowed recovery of all sums previously paid under protest. The case was submitted on the pleadings without the introduction of any evidence. The appeal comes directly to this court because the revenue is involved and the State is an interested party.

The Retailers' Occupation tax act (Ill.Rev.Stat.1937, chap. 120, §§ 440, 441) lays a tax upon all persons engaged in the business of selling tangible personal property for use or consumption and not for resale. In February, 1938, the Department of Finance revised its rules and regulations to require optical supply houses to pay the Retailers' Occupation tax on all sales of eyeglasses and other optical supplies delivered to optometrists and oculists. It was against the enforcement of this order, designated as rule 32, that the optical supply houses sought and secured their injunction. The complaint shows that after the manufacture and preparation of eyeglasses and other optical supplies to order, the plaintiffs deliver them to optometrists and oculists who, in turn, transfer them to their patients in accordance with their previous arrangements. Were such sales of optical supplies by these plaintiffs to optometrists and oculists for use and consumption and not for resale?

We held in the recent decision of Babcock v. Nudelman, 367 Ill. 626, 12 N.E.2d 635, that the profession of optometry was not within the terms and provisions of the Retailers' Occupation tax act even though optometrists and oculists, as an incidentto the practice of their profession, transfer personal property for use or consumption. We there recognized that optometrists were licensed by the State and possessed certain minimum requirements of character, education and fitness not required by the State for those who engage in the usual trade or business of selling tangible personal property at retail. We held that it was this special training and high degree of professional skill which distinguished the transaction of an optometrist and oculist and made their examination of their customers' eyes the important objective, with the orders and sales of glasses and frames purely incidental to the other services rendered. We did not hold in the Babcock case, as claimed by the Department of Finance, that the furnishing of eyeglasses by an optometrist is not a transfer of tangible personal property for use or consumption. See Babcock v. Nudelman, supra, at page 630, 12 N.E.2d 635. In Herlihy Mid-Continent Co. v. Nudelman, 367 Ill. 600, 12...