Wilmette Park Dist. v. Campbell
| Decision Date | 29 September 1947 |
| Docket Number | No. 43 C 318.,43 C 318. |
| Citation | 76 F. Supp. 924 |
| Parties | WILMETTE PARK DIST. v. CAMPBELL, Collector of Internal Revenue. |
| Court | U.S. District Court — Northern District of Illinois |
Henry J. Brandt and Poppenhusen, Johnston, Thompson & Raymond, all of Chicago, Ill., for plaintiff.
Otto Kerner, Jr., and J. Albert Woll, U. S. Attys., and John M. Kiely, Asst. U. S. Atty., all of Chicago, Ill., and Arthur L. Jacobs, Sp. Asst. to Atty. Gen., for defendant.
In this suit to recover certain sums paid under protest, the plaintiff relies on three propositions: (1) That its operation of a bathing beach on park land is a governmental, not a proprietary function, and hence that the federal admissions tax may not be levied against persons paying the charge assessed by the plaintiff for the use of the beach; (2) that the plaintiff's officials may not be required to assist in the collection of federal taxes; (3) that the charge assessed by plaintiff for the use of the beach and its facilities is not an admission charge.
The first proposition raises the constitutional question of the immunity of a state and its subdivisions from the federal taxing power. Constitutional questions, of course, should not be determined by a court unless they are necessarily raised by the case before it. I think that this constitutional question is not necessarily presented by this case, and that it is therefore unnecesary to consider whether the operation of a public bathing beach is a governmental or proprietary function within the sharply limited meaning of "governmental" given in New York v. United States, 326 U.S. 572, 66 S.Ct. 310, 90 L.Ed. 326. The tax here was levied not upon the plaintiff's operation of the beach or upon the plaintiff's property, but upon those members of the public who paid the charge levied by the plaintiff as a prerequisite to the use of the beach. The situation here presented is thus different from the one in New York v. United States, supra, in which the federal tax was laid upon the sale by the state of mineral water from state-owned springs, although of course the incidence of the tax may have been on the ultimate consumer, as in the case of the usual sales or excise tax.
The second proposition is refuted by the decision in Allen v. Regents, 304 U.S. 439, 58 S.Ct. 980, 82 L.Ed. 1448, in which the federal admissions tax on admissions to Georgia college football games was upheld. Thus if a federal tax may constitutionally be levied upon a certain type of state activity as it is levied upon corresponding types of activities conducted by private persons, the administrative burden which may be laid upon private persons in the collection of the tax may likewise be laid upon state and local officials.
However, I think the third proposition is valid, and disagree with the defendant's argument that it is immaterial whether or not the plaintiff seeks to operate a public beach at cost or at a profit. In levying a charge which brings in approximately enough revenue to cover the cost of operation, the plaintiff is in fact levying a use tax on those who use its beach facilities, although it is called an admission charge. This ruling is not in conflict with Allen v. Regents, supra, in which the federal admissions tax was upheld as applied to purchasers of tickets to state university football games. The revenue from collegiate football games is obviously not intended merely to equal the cost of maintaining the football stadium. If a public beach is operated for profit, the charge for tickets would not be a use tax but an admission within the meaning of section 1700 of the Internal Revenue Code, 26 U.S.C.A.Int.Rev.Code, § 1700.
The defendant makes the point that the third proposition argued by the plaintiff in its brief was not raised in the complaint and therefore is not before the court. In view of the policy behind the rule allowing amendment of pleadings to conform to proof, and of the fact that the defendant does not plead surprise, I think that the third proposition should not be stricken.
The defendant's motion for judgment is therefore denied. The plaintiff is entitled to judgment for the amount paid under protest, and interest, except for the sum of $57.20 paid to the defendant's predecessor in 1942.
Counsel for the plaintiff may prepare and file with the Court, in writing, within twenty days from the date hereof, proposed findings of fact, conclusions of law and a draft of a proposed decree, consistent with the views herein expressed, delivering copies thereof to counsel for the defendant. Within twenty days of the receipt of such copies, counsel for the defendant may prepare and file with the Court, in writing, his observations with reference thereto and suggestions for the modification thereof, delivering a copy of such observations and suggestions to counsel for the plaintiff. Within ten days thereafter counsel for the plaintiff may present to the Court, in writing, his reply to such observations and suggestions. Whereupon, the matter of making findings of fact, conclusions of law and a decree herein will be taken by the Court without further argument.
1. Plaintiff is a body politic and corporate, organized in 1908 under the provisions of a statute of the State of Illinois, approved June 24, 1895, entitled "An Act to provide for the organization of park districts and the transfer of submerged lands to those bordering on navigable bodies of water." Illinois Revised Statutes, 1945, c. 105, pars. 256 through 295.
2. Plaintiff is administered by a Board of Commissioners under the provisions of the aforesaid Illinois statutes, elected by the people residing in the District. The first Board of Commissioners was elected at a general election held in pursuance of the statute on January 14, 1908, and the declaration of the result of such public election was made by an order of the County Court of Cook County entered January 17, 1908.
3. Nigel D. Campbell was and is Collector of Internal Revenue for the First District of Illinois since January 1, 1945 for the duration of the period in suit.
4. The Wilmette Park District consists of an area of approximately 2.8 square miles, located within the incorporated area of the Village of Wilmette in Cook County, Illinois, a village organized and existing under and by virtue of Chapter 24 of the Statutes of the State of Illinois, an act known as the Revised Cities and Villages Act, Ill.Rev.Stat. 1945, c. 24, § 1 et seq., which village has a population of approximately 20,000. Included within the District are four park areas aggregating approximately .78 square miles. The largest park area, known as Washington Park, extends along the shore of Lake Michigan for approximately three-fourths of a mile. The land area of Washington Park was acquired...
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Wilmette Park Dist v. Campbell
...for refund which were rejected, and in 1946 brought this suit against the Collector. The District Court entered judgment for petitioner. 76 F.Supp. 924.2 The Court of Appeals for the Seventh Circuit reversed. 172 F.2d 885. Because the questions presented have importance in the administratio......
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Wilmette Park Dist. v. Campbell
...Judge, and LINDLEY, District Judge. MAJOR, Chief Judge. This is an appeal from a judgment in favor of the plaintiff, entered September 29, 1947, 76 F.Supp. 924, in an action to recover certain taxes theretofore paid to the defendant as the result of an alleged illegal levy and assessment. T......