People v. Werner

• Decision Date: 10 December 1936
• Docket Number: No. 23748.,23748.
• Citation: 5 N.E.2d 238,364 Ill. 594
• Parties: PEOPLE v. WERNER.
• Court: Illinois Supreme Court

364 Ill. 594

5 N.E.2d 238

PEOPLE

v.WERNER.

No. 23748.

Supreme Court of Illinois.

Dec. 10, 1936.

Error to Sangamon County Court; Harlington Wood, Judge.

Jess Werner was convicted of willful failure to make a return and report to the Director of Finance under the Retailers' Occupation Tax Act, and he brings error.

Affirmed.

See, also, Department of Finance v. Werner, 5 N.E.(2d) 241.Hodges & Tragethon and Herman H. Cohn, all of Springfield, for plaintiff in error.

Otto Kerner, Atty. Gen. (A. B. Dennis, of Danville, and John F. McGinnis, of Springfield, of counsel), for the People.

ORR, Justice.

We are asked by this writ of error to determine primarily whether the Retailers' Occupation Tax Act, which imposes a 3 per cent. tax on gross receipts of sales of tangible personal property at retail, is in its operation unconstitutional because as applied to retail sales of gasoline it is allegedly a tax upon a tax. The case comes here from the county court of Sangamon county, which held plaintiff in error, Jess Werner, guilty of willfully failing to make a returnand report to the Director of Finance of the State of Illinois and assessed a fine against him of $250 and costs.

The case was tried below upon a stipulation of facts, wherein it was agreed that defendant, Werner, was on the dates referred to in the various counts engaged in the sale of gasoline and other products, such as grease, oil, etc.; that the products sold by him were purchased in bulk from various refineries and wholesalers; that defendant paid, as a separate item of the cost of the wholesale billing or statement, a federal tax on gasoline at the rate of one and one-half cents per gallon up to January 1, 1934, and subsequently at the rate of one cent per gallon; that the total of the federal excise tax paid by defendant during the period covered by the information was $3,541.26, with an additional $160 paid on motor oil. It was further stipulated that the ‘gross receipts' of the business done by defendant for the period of the information was $35,285.65, which sum included the federal excise tax of $3,701.26 and the Illinois motor fuel tax of $7,980.25, the latter sum having been collected by defendant pursuant to the law and paid to the Department of Finance. It was stipulated that the director of the Department of Finance had established certain rules, and that special rule 14, as revised February 1, 1934, and set forth in People's Exhibit C, provided that, in determining ‘gross receipts' from sales of motor fuel, dealers were allowed to deduct the Illinois motor fuel tax of three cents per gallon collected by them from the purchaser.

By his own stipulation Werner has admitted that he has failed to comply with the express provisions of the Retailers' Occupation Tax Act (Laws 1933, p. 924, Smith-Hurd Ill.Stats. c. 120, § 440 et seq. and notes; Cahill's Stat.1933, c. 120, par. 426 et seq., p. 2389 et seq.), section 3 of which (Smith-Hurd Ill.Stat. c. 120, § 442) requires monthly reports to the Department of Finance for all those engaged in any occupational selling of tangible personal property at retail. He has also admitted that under the regulations of the Department of Finance he, in common with all other gasoline retailers in this State, was allowed to, and did, deduct from his gross receipts each month the amounts which he had previously collected at the rate of three cents per gallon and reported under the Motor Fuel Tax Law of 1929. Laws 1929, p. 625, Smith-Hurd Ill.Stats., c. 120, § 417 et seq. and notes; Cahill's Rev.Stat.1933, c. 95a, par. 79 et seq., p. 1901 et seq. He now seeks to justify his failure to make the monthly reports and payments required, with the deductions allowed, under the Retailers' Occupation Tax Act, by allegations that the act is unreasonable, discriminatory, amounts to double taxation, and is therefore unconstitutional.

We have held the Retailers' Occupation Tax Act is valid and constitutional, that it does not deprive the retailer of property without due process of law, and that its imposition as a privilege tax, measured by gross receipts upon retail sales of tangible personal property, does not render it invalid for lack of uniformity. Reif v. Barrett, 355 Ill. 104, 188 N.E. 889. We have also held that the fact that in some instances, because of competition, the retailer's inability to pass the tax on to the consumer does not make the act inapplicable to such retailer or unlawful, and that the act is not unconstitutional as resulting in double taxation, since it imposes an occupation tax and not a property tax. Franklin County Coal Co. v. Ames, 359 Ill. 178, 194 N.E. 268. It is also pertinent to the issues here raised to observe our holding, under the Motor Fuel Tax Law of 1929, that the gasoline retailer does not pay the tax but simply acts in a fiduciary capacity as an agent of the State in its collection, and that the money collected in no sense belongs to the retailer but is the property of the State. People v. Kopman, 358 Ill. 479, 193 N.E. 516.

Werner first erroneously contends that ‘he is paying three cents per gallon on all gasoline sold to consumers or used by himself for the privilege of carrying on the business of the retail sales of gasoline for use and consumption.’ By this statement he refers to the payment of three cents per gallon by the consumer under the Motor Fuel Tax Law of 1929, which he, the retailer, simply collects for the State in a fiduciary capacity and later passes over to the Department of Finance, less the actual cost of making the collection and payment, not to exceed 2 per cent. of the amount collected. Under these circumstances it will readily be seen that Werner has actually paid nothing under the Motor Fuel Tax Law for the privilege of carrying on his retail business, but, on the other hand, he is actually paid a small fee for collecting this tax from the consumer and turning it over to the State. He is then...