Youhas v. Ice

• Decision Date: 20 March 1974
• Docket Number: No. 45881,45881
• Citation: 309 N.E.2d 6,56 Ill.2d 497
• Parties: Edward R. YOUHAS et al., Appellees, v. Willard ICE, Acting Director of Revenue, et al., Appellants.
• Court: Illinois Supreme Court

Page 6

309 N.E.2d 6

56 Ill.2d 497

Edward R. YOUHAS et al., Appellees, v. Willard ICE, Acting Director of Revenue, et al., Appellants.

No. 45881.

Supreme Court of Illinois.

March 20, 1974.

William J. Scott, Atty. Gen., Chicago (Paul J. Bargiel, Asst. Atty. Gen., of counsel), for appellants.

Alvin R. Becker, Chicago, for appellees.

WARD, Justice.

In June 1972 the plaintiffs, Edward R. Youhas and Sharon Weiss, each acting individually and on behalf of all other persons similarly situated, obtained leave to file a taxpayers' suit (Ill.Rev.Stat.1971, ch. 102, par. 11 et seq.) against defendant Willard Ice, Acting Director of the Illinois Department of Revenue, and other State officials. The suit sought to enjoin the disbursement of public funds under a statute, which they alleged to be unconstitutional, authorizing the refund of Illinois retailers' occupation taxes paid on certain Federal excise taxes (Ill.Rev.Stat.1972 Supp., ch. 127, par. 39d--1). The circuit court of Cook County, after denying the defendants' motion to dismiss the complaint, declared the statute to be unconstitutional. The court held that it was special legislation in violation of the Constitution of Illinois and that it denied equal protection and due process. The defendants were enjoined from taking any action to carry out the provisions of the statute. Because of the holding of unconstitutionality the appeal of the defendants has been taken directly to this court under Supreme Court Rule 302(a)(1), Ill.Rev.Stat.1973, c. 110A, § 302(a)(1). 50 Ill.2d R. 302(a)(1).

Effective December 10, 1971, the Congress repealed a Federal excise tax which had been imposed on the sale of new automobiles, light trucks and related trailers by manufacturers (26 U.S.C. sec. 4061(a)) and also provided for refunds of the excise tax paid on purchases made between August 16 and December 10, 1971. The tax had been passed on by manufacturers as part of their selling price and the retailers in turn had passed it on to the purchasers as a part of the sales price. The Illinois retailers' occupation tax is calculated on the basis of the total sales price, and that price for automobiles, light trucks and related trailers in the period between August 16 and December 10, 1971, included the repealed Federal excise tax (Ill.Rev.Stat.1967, ch. 120, par. 439.3). In 1972 the legislature approved 'An Act to authorize the Department of Revenue to make certain refunds' (Ill.Rev.Stat., 1972 Supp., ch. 127, par. 39d--1). This legislation authorized the Department of Revenue to make refunds of use or retailers' occupation taxes paid on the refunded Federal excise taxes directly to purchasers of automobiles, light trucks and related trailers between August 16 and December 10, 1971. The statute by its terms will expire on July 1, 1974.

Plaintiff Weiss brought her action as a general taxpayer seeking to enjoin the expenditure of public funds. Youhas sued as a member of a class that does not qualify for a refund under the statute, because its purchases were not of new automobiles, trucks or related trailers.

The defendants' contention is that the statute is based on a reasonable classification and must be considered general, not special, legislation.

The plaintiffs argue that the statute is unconstitutional because it is special legislation, arbitrary, 'without rational basis' and denies equal protection and due process. They urge that the legislature was without power to grant certain taxpayers a direct refund from the Department of Revenue and exclude other taxpayers, whom they mistakenly describe as identically situated, from obtaining a direct refund from the Department of Revenue.

We begin by observing that, as we recently noted in People ex rel. City of Salem v. McMackin, 53 Ill.2d 347, 291 N.E.2d 807, the prohibition against special legislation does not mean that a law must affect every person in the State alike. Rather, it means that '* * * a law shall operate uniformly throughout the State in all localities and on all persons in like circumstances and conditions. (People ex rel. Vermilion County Conservation Dist. v. Lenover, 43 Ill.2d 209, 217, 251 N.E.2d 175)' The authority of the legislature to make classifications is clear. 'If there is a reasonable basis for differentiating between the class to which the law is applicable and the class to which it is not, the General Assembly may constitutionally classify persons and objects for the purpose of legislative regulation or control, and may pass laws applicable only to such persons or objects. (Hunt v. County of Cook, 398 Ill. 412, 76 N.E.2d 48)' Bridgewater v. Hotz, 51 Ill.2d 103, 111, 281 N.E.2d 317, 322.

We judge there was a reasonable basis for the...