Sta-Ru Corp. v. Mahin, STA-RU

Citation356 N.E.2d 67,1 Ill.Dec. 67,64 Ill.2d 330
Decision Date01 October 1976
Docket NumberSTA-RU,No. 48226,48226
Parties, 1 Ill.Dec. 67 CORPORATION, Appellee, v. George E. MAHIN, Director of the Department of Revenue, et al., Appellants.
CourtSupreme Court of Illinois

Page 67

356 N.E.2d 67
64 Ill.2d 330, 1 Ill.Dec. 67
STA-RU CORPORATION, Appellee,
v.
George E. MAHIN, Director of the Department of Revenue, et
al., Appellants.
No. 48226.
Supreme Court of Illinois.
Oct. 1, 1976.

[64 Ill.2d 331] William J. Scott, Atty. Gen., Chicago (Patricia Rosen, Asst. Atty. Gen., of counsel), for appellants.

Hull, Campbell & Robinson, Decatur (Michael I. Campbell and Dennis J. O'Hara, Decatur, of counsel), for appellee.

WARD, Chief Justice.

The principal question on this appeal is whether sales to the plaintiff, the Sta-Ru Corporation, of paper and plastic containers used by it to contain foods and beverages consumed by the plaintiff's customers on its premises are 'sale(s) at retail' and thus taxable under the Illinois Retailers' Occupation Tax Act (hereafter ROTA) (Ill.Rev.Stat.1975, ch. 120, par. 440 Et seq.) and the Illinois Use Tax Act (Ill.Rev.Stat.1975, ch. 120, par. 439.1 Et seq.).

[64 Ill.2d 332] The ROTA provides:

"Sale at retail' means any transfer of the ownership of or title to tangible personal

Page 68

[1 Ill.Dec. 68] property to a purchaser, for the purpose of use or consumption, and not for the purpose of resale in any form as tangible personal property to the extent not first subjected to a use for which it was purchased, for a valuable consideration: * * *.' (Ill.Rev.Stat.1975, ch. 120, par. 440.)

The language of the Use Tax Act is identical, except for the words 'or consumption,' which are omitted. Ill.Rev.Stat.1975, ch. 120, par. 439.2.

Sta-Ru challenges the validity of Rule 51 of the Department of Revenue's Rules and Regulations, which are promulgated under authority granted the Department by the ROTA (Ill.Rev.Stat.1975, ch. 120, par. 451.) Rule 51 provides for the taxation of which the plaintiff complains. It provides:

'Sales of paper napkins, drinking straws, paper cups and paper plates to restaurants (including drive-in restaurants) and other vendors of food or beverages for use on the premises as serving equipment in lieu of more durable kinds of serving equipment (such as linen napkins, metal drinking straws, glass or porcelain cups and plates) are taxable retail sales. Sles of paper napkins, drinking straws, paper cups and paper plates to food and beverage vendors are nontaxable sales for resale if the items are resold for a direct and specific charge, or if the items are employed as containers for food or beverages contained therein and are transferred with the food or beverages to the purchaser thereof either by being delivered by the food or beverage vendor away from his premises to his customers or by being delivered on the premises of the food or beverage vendor to customers who take the packaged food or beverages away from such premises with them for consumption elsewhere (i.e., the so-called 'carry-out trade'). * * *'

Sta-Ru operates six Dairy Queen--Brazier restaurants in Decatur which sell varieties of ice cream, custard, beverages, hamburgers and other foods. Sta-Ru brought an action in the circuit court of Macon County to enjoin the [64 Ill.2d 333] Department of Revenue from imposing and collecting the retailers' occupation and use taxes on...

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  • De Fontaine v. Passalino
    • United States
    • United States Appellate Court of Illinois
    • December 24, 1991
    ... ... (Sciarabba v. Chrysler Corp. (1988), 173 Ill.App.3d 57, 122 Ill.Dec. 870, 527 N.E.2d 368.) Valuable consideration for a ... The question of the adequacy of consideration is not for the court to inquire into. (Sta-Ru Corp. v. Mahin (1976), 64 Ill.2d 330, 1 Ill.Dec. 67, 356 N.E.2d 67.) Upon inquiry, however, the ... ...
  • Rybak v. Dressler
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    • United States Appellate Court of Illinois
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    ... ... 351 N.E.2d 280.) The courts generally will not inquire into the adequacy of consideration (Sta-Ru Corp. v. Mahin (1976), 64 Ill.2d 330, 1 Ill.Dec. 67, 356 N.E.2d 67; Adams v. Lockformer Co ... ...
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    ... ... Marshall v. Burger King Corp., 222 Ill.2d 422, 430-31, 305 Ill.Dec. 897, 856 N.E.2d 1048 (2006). Even though the circuit court ... Courts generally will not inquire into the adequacy of consideration for a contract. Sta-Ru Corp. v. Mahin, 64 Ill.2d 330, 338, 1 Ill.Dec. 67, 356 N.E.2d 67 (1976). Moreover, Gallagher ... ...
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