National Bank of Hyde Park in Chicago v. Isaacs, No. 37312

CourtSupreme Court of Illinois
Writing for the CourtSCHAEFER
Citation188 N.E.2d 704,27 Ill.2d 205
PartiesNATIONAL BANK OF HYDE PARK IN CHICAGO et al., Appellees, v. Theodore J. ISAACS, Director of Revenue, et al., Appellants.
Decision Date01 February 1963
Docket NumberNo. 37312

Page 704

188 N.E.2d 704
27 Ill.2d 205
NATIONAL BANK OF HYDE PARK IN CHICAGO et al., Appellees,
v.
Theodore J. ISAACS, Director of Revenue, et al., Appellants.
No. 37312.
Supreme Court of Illinois.
Feb. 1, 1963.
Rehearing Denied March 27, 1963.

[27 Ill.2d 206]

Page 705

William G. Clark, Atty. Gen., Springfield (William C. Wines, Raymond S. Sarnow, and A. Zola Groves, Asst. Attys. Gen., of counsel), for appellants.

Adelbert Brown, Chicago, for appellees.

SCHAEFER, Justice.

By an amendment to the Retailers' Occupation Tax Act adopted in 1953, the General Assembly exempted form the tax the proceeds of 'sales to the State of Illinois, any county, political subdivision or municipality thereof, or to any instrumentality or institution of any of the governmental units aforesaid.' (Ill.Rev.Stat.1953, chap. 120, par. 441.) This exemption was repealed by an act approved July 31, 1961. (Ill.Rev.Stat.1961, Stat.1961, chap. 120, par. 441.) In the interval between its enactment and its repeal, it had been held invalid both by the United States District Court for the Northern District of Illinois, (United States v. Department of Revenue (N.D.Ill.), 191 F.Supp. 723) and by this court. (People ex rel. Holland Coal Co. v. Isaacs, 22 Ill.2d 477, 176 N.E.2d 889.) The decision in both cases was upon the ground that the exemption of gross receipts from sales of tangible personal property to the State, without also exempting gross receipts from sales of tangible personal property to the United States, created an invalid and unconstitutional discrimination.

The complaint in this case was filed on October 14, 1960, while the exemption was in effect, by the National Bank of Hyde Park in Chicago. It alleged that national banks are instrumentalities of the United States Government, and that [27 Ill.2d 207] the statutory exemption unlawfully discriminates against them because the tax is imposed upon gross receipts from sales of office equipment and supplies to national banks, while gross receipts from sales of similar equipment to instrumentalities of the State are exempted. Numerous companies engaged in the business of selling supplies to national banks were joined as defendants, and they were required, by temporary injunction, to pay under protest any taxes alleged to be due from them on account of such sales. In April of 1962, the circuit court of Cook County entered a decree which provided that the plaintiff 'is entitled to a refund of all payments of Retailers' Occupation Tax made by the defendant-suppliers under protest to and including the period ending July 31, 1961, * * *.' The defendant State officials have appealed directly to this court. The revenue is involved.

No question is presented here of the sovereign immunity of the United States from State or local taxes. 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. (People ex rel. Holland Coal Co. v. Isaacs, 22 Ill.2d 477, 480-481, 176 N.E.2d 889; Alabama v. King & Boozer (1941), 314 U.S. 1, 62 S.Ct. 43, 86 L.Ed. 3; Kern-Limerick, Inc. v. Scurlock, (1953), 347 U.S. 110, 74 S.Ct. 403, 98 L.Ed. 546.) In the three-judge District Court proceedings involving this exemption, the purchaser was the United States itself, through its Department of Defense, and under the terms of its procurement contracts the United States was obliged to reimburse the retailer for retailers' occupation taxes incurred. The District Court nonetheless held the retailer subject to tax, after the discrimination had been removed, and the United States Supreme Court had affirmed. United States v. Department of Revenue (1961), 191 F.Supp. 723, 727-28, upon remand (1962) 202 F.Supp. 757, 760, affirmed per curiam (1962), 371 U.S. 21,...

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12 practice notes
  • First Agr. Nat. Bank of Berkshire County v. State Tax Commission
    • United States
    • United States State Supreme Judicial Court of Massachusetts
    • July 27, 1967
    ...Co. v. State Bd. of Equalization, 11 Cal.2d 156, 78 P.2d 731, 117 A.L.R. 838; National Bank of Hyde Park v. Isaacs, Director of Rev., 27 Ill.2d 205, 188 N.E.2d 704; Federal Reserve Bank v. Department of Rev., 339 Mich. 587, 64 N.W.2d 639; National Bank of Detroit v. Department of Rev., 340 ......
  • Town of Cicero v. Fox Valley Trotting Club, Inc., No. 47735
    • United States
    • Supreme Court of Illinois
    • October 1, 1976
    ...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, 188 N.E.2d 704, and First National Bank of Maywood v. Jones, 48 Ill.2d 282, 288, 269 N.E.2d 494, 497, wherein we stated that 'the custo......
  • Security Nat. Bank & Trust Co. v. First W. Va. Bancorp., Inc., No. 14938
    • United States
    • Supreme Court of West Virginia
    • May 5, 1981
    ...National State Bank v. Long, 469 F.Supp. 1068 (D.N.J.1979), modified, 630 F.2d 981 (3d Cir., 1980); National Bank of Hyde Park v. Isaacs, 27 Ill.2d 205, 188 N.E.2d 704 (1963); Braeburn Security Corp. v. Smith, 15 Ill.2d 55, 153 N.E.2d 806, app. dismissed, 359 U.S. 311, 79 S.Ct. 876, 3 L.Ed.......
  • Springfield Rare Coin Galleries, Inc. v. Johnson, No. 62552
    • United States
    • Supreme Court of Illinois
    • December 19, 1986
    ...means of a price increase does not alter its nature. It is the legal incidence of the tax that controls." National Bank v. Isaacs (1963), 27 Ill.2d 205, 207, 188 N.E.2d [115 Ill.2d 230] In summary, the retailers' occupation tax is plainly a tax upon retailers. The exemption exclusion, as a ......
  • Request a trial to view additional results
12 cases
  • First Agr. Nat. Bank of Berkshire County v. State Tax Commission
    • United States
    • United States State Supreme Judicial Court of Massachusetts
    • July 27, 1967
    ...Co. v. State Bd. of Equalization, 11 Cal.2d 156, 78 P.2d 731, 117 A.L.R. 838; National Bank of Hyde Park v. Isaacs, Director of Rev., 27 Ill.2d 205, 188 N.E.2d 704; Federal Reserve Bank v. Department of Rev., 339 Mich. 587, 64 N.W.2d 639; National Bank of Detroit v. Department of Rev., 340 ......
  • Town of Cicero v. Fox Valley Trotting Club, Inc., No. 47735
    • United States
    • Supreme Court of Illinois
    • October 1, 1976
    ...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, 188 N.E.2d 704, and First National Bank of Maywood v. Jones, 48 Ill.2d 282, 288, 269 N.E.2d 494, 497, wherein we stated that 'the custo......
  • Security Nat. Bank & Trust Co. v. First W. Va. Bancorp., Inc., No. 14938
    • United States
    • Supreme Court of West Virginia
    • May 5, 1981
    ...National State Bank v. Long, 469 F.Supp. 1068 (D.N.J.1979), modified, 630 F.2d 981 (3d Cir., 1980); National Bank of Hyde Park v. Isaacs, 27 Ill.2d 205, 188 N.E.2d 704 (1963); Braeburn Security Corp. v. Smith, 15 Ill.2d 55, 153 N.E.2d 806, app. dismissed, 359 U.S. 311, 79 S.Ct. 876, 3 L.Ed.......
  • Springfield Rare Coin Galleries, Inc. v. Johnson, No. 62552
    • United States
    • Supreme Court of Illinois
    • December 19, 1986
    ...means of a price increase does not alter its nature. It is the legal incidence of the tax that controls." National Bank v. Isaacs (1963), 27 Ill.2d 205, 207, 188 N.E.2d [115 Ill.2d 230] In summary, the retailers' occupation tax is plainly a tax upon retailers. The exemption exclusion, as a ......
  • Request a trial to view additional results

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