Tri-America Oil Co. v. Department of Revenue
| Decision Date | 30 July 1982 |
| Docket Number | TRI-AMERICA,No. 81-950,81-950 |
| Citation | 73 Ill.Dec. 257,454 N.E.2d 1,117 Ill.App.3d 774 |
| Court | United States Appellate Court of Illinois |
| Parties | , 73 Ill.Dec. 257 OIL COMPANY, an Illinois Corporation, Plaintiff-Appellee, v. DEPARTMENT OF REVENUE, Retailers' Occupation Tax Division, and James B. Zagel, Director, Illinois Department of Revenue, Defendants-Appellants. |
Berkson, Gorov & Levin, Ltd., Chicago (Arthur M. Gorov, Norman N. Berkson, Chicago, of counsel), for plaintiff-appellee.
Plaintiff filed a complaint for administrative review in the circuit court seeking to set aside an assessment of taxes judged by Plaintiff is a retail and wholesale seller of gasoline. Defendants audited plaintiff for the period January, 1975 to December, 1977 and found that during this period, plaintiff sold gas to a station, which was leased from plaintiff and operated by one Alfonzo Chavez as an independent dealer. The sales to Chavez amounted to $151,023.45.
[73 Ill.Dec. 258] defendants as due under the Retailers' Occupation Tax Act (Ill.Rev.Stat.1981, ch. 120, par. 440 et seq.) and the Municipal Retailers' Occupation Tax Act (Ill.Rev.Stat.1981, ch. 24, par. 8-11-1 et seq.) (hereinafter both referred to as the Act). The circuit court reversed the administrative decision and this appeal follows.
Plaintiff claimed tax deductions for the sales to Chavez on the basis that the sales were made for the purpose of resale, however, no resale certificate for Chavez was produced. Evidence established that Chavez did not have a resale certificate, but it was plaintiff's policy and practice to obtain one from all independent dealers and they had obtained certificates from all dealers except Chavez. Because plaintiff did not have Chavez' resale certificate, deductions for the sales to Chavez were disallowed and plaintiff was assessed $10,862.51 for tax deficiencies of State and Municipal Retailers' Occupation Tax, plus penalties and interest. On review, the circuit court reversed based on the grounds that Dearborn Wholesale Grocers, Inc. v. Whitler (1980), 82 Ill.2d 471, 45 Ill.Dec. 892, 413 N.E.2d 370 was controlling.
OPINIONDefendants argue that plaintiff's occupation places it within the class of vendors covered by the Act. Thus, Dearborn is not applicable to this situation and it was error for the circuit court to reverse the administrative determination.
Section 2c of the Act requires the purchaser who is a reseller of tangible personal property "in such a way that such resales are not taxable under this Act" to apply for a resale certificate. The Act also provides in pertinent part that:
" 'Sale at retail' " shall be construed to include any transfer of the ownership of or title to tangible personal property to a purchaser, for use or consumption by any other person to whom such purchaser may transfer the tangible personal property without a valuable consideration, and to include any transfer, whether made for or without a valuable consideration, for resale in any form as tangible personal property unless made in compliance with Section 2c of this Act * * *." Ill.Rev.Stat.1981, ch. 120, par. 440.
Ill.Rev.Stat.1981, ch. 120, par. 441c.
The threshold question is who must comply with the resale certificate requirements of the Act. This same issue was considered recently in Illinois Cereal Mills, Inc. v. Department of Revenue of the State of Illinois (1982), 106 Ill.App.3d 53, 61 Ill.Dec. 933, 435 N.E.2d 774. In that case, the evidence conclusively showed that the sales involved in the...
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