Federated Distributors, Inc. v. Johnson

JUSTICE MILLER,

specially concurring:

I concur in the result reached by the majority. I write separately to emphasize the narrow scope of the holding in this case, and the need for legislative action on this subject.

I agree with the majority that the Department of Revenue’s treatment of the item referred to by the plaintiffs as “New Products” is subject to the uniformity provision contained in article IX, section 2, of the Illinois Constitution (Ill. Const. 1970, art. IX, §2). Assuming that the uniformity provision is limited in scope to revenue measures and does not apply to licensing fees or other strictly regulatory measures imposed pursuant to the police power, I believe that there are adequate grounds for holding that the tax at issue in this case is a revenue measure and therefore subject to the uniformity requirement. The taxes imposed under article VIII of the Liquor Control Act of 1934 (Ill. Rev. Stat. 1985, ch. 43, pars. 158 through 165a) are independent of the licensing scheme established by articles V and VII of the Act (Ill. Rev. Stat. 1985, ch. 43, pars. 115 through 118.1, pars. 145 through 157). Moreover, the licensing fees imposed under section 5 — 3 of the Act (Ill. Rev. Stat. 1985, ch. 43, par. 118) are payable to the Liquor Control Commission, the agency responsible for administering and enforcing the Act, for deposit in the Dram Shop Fund (see Ill. Rev. Stat. 1985, ch. 127, par. 142y). Appropriations for the Commission’s annual expenses are drawn from the Dram Shop Fund, with any surplus going to the general revenue fund (see Ill. Rev. Stat. 1985, ch. 127, par. 144.20). In contrast, the taxes imposed under article VIII are payable to the Department of Revenue (see Ill. Rev. Stat. 1985, ch. 127, par. 39b6); they are not earmarked for a special fund and therefore go directly to the general revenue fund (see Ill. Rev. Stat. 1985, ch. 127, par. 140). These differences illustrate the distinct purposes of the provisions and support the conclusion that articles V and VII are licensing measures, while article VIII is a revenue-producing measure. (See Crocker v. Finley (1984), 99 Ill. 2d 444, 452.) Article VIII therefore is subject to the uniformity provision of the State Constitution.

Accordingly, under our recent decision in Searle Pharmaceuticals, Inc. v. Department of Revenue (1987), 117 Ill. 2d 454, the appropriate inquiry in this case is whether the Department’s action here in deciding to tax New Products at the rate applicable to distilled spirits rather than the rate that the Department has decided to apply to wine coolers is supported by a real and substantial difference between the two. As the parties’ stipulation demonstrates, the items are nearly identical, and I would conclude that there is no real and substantial difference between the two that that would justify a tax on one that is more than eight times the tax imposed on the other. So long as the Department taxes wine coolers as ordinary wine, the same result should apply as well to New Products. This is not to say that the legislature could not place both items in a category different from ordinary wine; I note, however, that this case does not present the question whether the uniformity provision of article IX, section 2, of the State Constitution would permit only those taxation schemes that are based exclusively on the percentage of alcohol by volume contained in a particular item. Action by the legislature may provide more definite guidance to the Department in its resolution of similar questions in the future.