People v. Parvin

• Decision Date: 06 December 1988
• Docket Number: No. 66471,66471
• Citation: People v. Parvin, 125 Ill.2d 519, 533 N.E.2d 813, 127 Ill.Dec. 731 (Ill. 1988)
• Parties: , 127 Ill.Dec. 731 The PEOPLE of the State of Illinois, Appellant, v. Robert J. PARVIN, Appellee.
• Court: Illinois Supreme Court

Page 813

533 N.E.2d 813

125 Ill.2d 519, 127 Ill.Dec. 731

The PEOPLE of the State of Illinois, Appellant, v. Robert J. PARVIN, Appellee.

No. 66471.

Supreme Court of Illinois.

Dec. 6, 1988.

Neil F. Hartigan, Atty. Gen., Springfield (Shawn W. Denney, Sol. Gen., and Terence M. Madsen, Joan G. Fickinger and Jack Donatelli, Asst. Attys. Gen., Chicago, of counsel), for the People.

Patrick B. Mathis, and Kevin J. Richter, of Mathis, Marifian & Richter, Ltd., Belleville, for appellee.

Justice STAMOS delivered the opinion of the court:

Defendant, Robert J. Parvin, was convicted in the circuit court of Winnebago County of failing to file monthly retailers' occupation tax (ROT) returns in violation of section 13 of the Retailers' Occupation Tax Act (Act) (Ill.Rev.Stat.1983, ch. 120, par. 452). During the relevant time period, section 13 provided that the failure to file such returns is a Class 4 felony. Defendant was sentenced to a 30-month term of probation, conditioned on the payment of $16,245 in restitution and performance of 100 hours of community service work.

The appellate court reversed, holding that corporate officers cannot be held criminally liable under the relevant portion of section 13 of the Act. Accordingly, the court ruled that the trial court erred in denying defendant's motion to dismiss the indictment. (164 Ill.App.3d 29, 115 Ill.Dec. 252, 517 N.E.2d 663.) This result conflicts with the appellate court decision in People v. Johnson (1985), 131 Ill.App.3d 803, 86 Ill.Dec. 880, 476 N.E.2d 56. We allowed the State's petition for leave to appeal (107 Ill.2d R. 315(a)) in order to resolve this conflict, and now affirm the judgment of the appellate court below. To the extent that Johnson is inconsistent with our holding herein, it is overruled.

The sole issue on appeal is whether defendant could be held criminally liable under the Act for failure to file corporate retailers' occupation tax returns.

At a bench trial the parties stipulated to the following facts. Between June 1983 and June 1984, defendant was the president and sole shareholder of Park Town Hall, Inc., a corporation which operated a restaurant and lounge called Park Town Hall. Park Town Hall engaged in the business of selling food and beverages at retail. Therefore Park Town Hall, Inc., was required to file monthly ROT returns under section 3 of the Act (Ill.Rev.Stat.1983, ch. 120, par. 442). The corporation failed to do so between June 1983 and June 1984. It was in good standing during this time and possessed a valid ROT certificate of registration. Defendant operated the business and was the corporate officer solely responsible for filing the ROT returns of Park Town Hall, Inc. For each of the months in question, the amount of tax due was more than $300. The trial court found defendant guilty of 12 counts of violating section 13 of the Act.

The sixth paragraph of section 13 of the Act, under which defendant was convicted, provides in relevant part:

"When the amount due is $300 or more, any person engaged in the business of selling tangible personal property at retail in this State who fails to file a return * * * is guilty of a Class 4 felony." (Ill.Rev.Stat.1983, ch. 120, par. 452.)

The appellate court found that defendant was not a "person engaged in the business of selling tangible personal property at retail in this State" and therefore he could not be held criminally liable. The court also rejected the State's contention that defendant could be held criminally liable by virtue of section 5-5(a) of the Criminal Code of 1961 (Ill.Rev.Stat.1983, ch. 38, par. 5-5(a)), which makes individuals criminally liable for certain conduct performed on behalf of a corporation.

We begin our analysis by examining the structure of the Act. Section 2 of the Act (Ill.Rev.Stat.1983, ch. 120, par. 441) imposes a tax "upon persons engaged in the business of selling tangible personal property at retail" in the amount of 5% of gross retail receipts. The Act requires such persons to file with the Department of Revenue monthly returns reporting the sales subject to the tax. (Ill.Rev.Stat.1983, ch. 120, par. 442.) The Act makes it unlawful for any person to engage in the business of selling personal property at retail in Illinois without a certificate of registration from the Department of Revenue. Ill.Rev.Stat.1983, ch. 120, par. 441a.

In section 1 of the Act, the definitional portion of the statute, "person" is defined to include a variety of entities, including a "natural individual." (Ill.Rev.Stat.1983, ch. 120, par. 440.) Relying on this provision, the State argues that since defendant is a natural individual, he can be held liable for violating section 13. We find, however, that the definition of "person" in section 1 is not dispositive of the issue before us.

The relevant inquiry is not simply who is a "person," but who is a "person engaged in the business of selling tangible personal property at retail." We agree with defendant that nothing in the provision defining "person" indicates that it is to be given multiple interpretations in connection with a single enterprise. It is well established that a corporation is separate and distinct as a legal entity from its shareholders and officers. (E.g., Main Bank v. Baker (1981), 86 Ill.2d 188, 204, 56 Ill.Dec. 14, 427 N.E.2d 94.) It is undisputed that corporate officers are not directly liable under the Act for payment of the tax. Yet if the returns are not filed, the State construes "person engaged in the business of selling tangible personal property at retail" to include not only the corporation but also its officers and shareholders. Such a construction ignores the fundamental distinction between the corporation and its officers and shareholders.

We find persuasive the defendant's contention, with which the appellate court agreed, that a comparison of the penalty provisions of the Act demonstrates that corporate officers cannot be held criminally liable for failure to file returns. The fifth paragraph of section 13 provides in relevant part:

"When the amount due is $300 or more, any person engaged in the business of selling tangible personal property at retail in this State who files, or causes to be filed, a fraudulent return, or any officer or agent of a corporation engaged in the business of selling tangible personal property at retail in this State who files or causes to be filed or signs or causes to be signed a fraudulent return filed on behalf of such corporation, * * * is guilty of a Class 4 felony." (Emphasis added.) Ill.Rev.Stat.1983, ch. 120, par. 452.

In contrast, the sixth paragraph of section 13, under which defendant was charged, omits the italicized language; it refers only to "any person engaged in" the retail business. Defendant maintains that since the legislature did not include corporate officers or agents in the failure-to-file provision, but specifically provided for criminal liability for corporate officers and agents who file fraudulent returns, the legislature did not intend officers and agents to be criminally liable for the failure of a corporation to file returns.

In People v. Johnson (1985), 131 Ill.App.3d 803, 86 Ill.Dec. 880, 476 N.E.2d 56, a case squarely on point, the appellate court rejected this precise argument. The court in Johnson, without discussion, stated that the foregoing argument "is supported neither by reason nor the language of the Act." (131 Ill.App.3d at 807, 86 Ill.Dec. 880, 476 N.E.2d 56.) (The State went even further, stating at oral argument before this court that a comparison of the penalty provisions in section 13 is "irrelevant" because, it says, defendant's status as a corporate officer is irrelevant.)

We disagree. While the parties have not addressed the point, we can certainly conceive of rational reasons why the legislature intended to cast a wider net for those who file fraudulent returns than for those who fail to file them. And, given the clear difference in wording between the provisions under discussion, we cannot agree that the argument premised on this difference is not supported by the language of the Act. The court in Johnson also relied on the definition of "person" in section 1 of the Act, which, for the reasons we have explained, is not dispositive.

We agree with the appellate court in the case at bar that the inclusion of specific language imposing criminal liability on corporate officers and agents for filing fraudulent returns, and the omission of this language from the failure-to-file provision, evince a legislative intent to refrain from imposing criminal liability on corporate officers and agents for the failure of the corporation to file returns. This construction is in accord with the principle that statutes should be construed so that no word or phrase is rendered superfluous or meaningless. (E.g., Niven v. Siqueira (1985), 109 Ill.2d 357, 365, 94 Ill.Dec. 60, 487 N.E.2d 937.) If the failure-to-file provision is read as imposing criminal liability on corporate officers and agents, the language specifically imposing such liability on officers and agents for filing fraudulent returns is rendered entirely superfluous.

More importantly, as the appellate court explained, criminal or penal statutes must be strictly construed and may not be extended in their application to cases which do not, by the strictest construction, come under their provisions. (164 Ill.App.3d at 33-34, 115 Ill.Dec. 252, 517 N.E.2d 663, citing People v. Mack (1985), 133 Ill.App.3d 788, 794, 88 Ill.Dec. 832, 479 N.E.2d 445; see also People v. Lutz (1978), 73 Ill.2d 204, 212-13, 22 Ill.Dec. 695, 383 N.E.2d 171.) Applying this principle to the provision at issue, we conclude it does not extend criminal liability to corporate officers and agents. Not only does the provision fail to specifically mention officers and agents, but, as we have explained, a comparison of that provision with the fraudulent-returns provision provides...