Illinois Bell Telephone Co. v. Allphin

JUSTICE GOLDENHERSH,

specially concurring:

I agree with the conclusion reached by the majority but cannot agree with all that is said in the opinion. The only reason for not holding the taxpayer liable here is that the Department’s erroneous construction of the statute prevented the taxpayer from recovering from its subscribers that portion of the tax authorized to be collected under section 36 of the Public Utilities Act (Ill. Rev. Stat. 1977, ch. 111⅔, par. 36).

Article XII(1) of the 1974 edition of the rules and regulations published by the Department of Revenue, without further qualification, provides that a taxpayer who transmits a message in interstate commerce “is not liable for tax with respect to his receipts therefrom.” That, of course, erroneously construes the statute.

Save for the fact that the taxpayer was deprived of the opportunity to recover a portion of the tax from its subscribers the erroneous interpretation by the Department should not serve to preclude collection of the tax. As the court said in Martin Oil Service, Inc. v. Department of Revenue (1971), 49 Ill. 2d 260, 269:

“It is undeniable that weight should be given a contemporaneous construction placed on an ambiguous statute by the officers charged with the duty of administering it. We do not believe the statute is ambiguous. Even if ambiguity is assumed, the rule obviously cannot be invoked to prevent those officers from rectifying an erroneous construction. An administrative construction of a statute is not binding if it is erroneous. Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294, 315, 77 L. Ed. 796, 807; Superior Coal Co. v. Department of Revenue, 4 Ill. 2d 459, 468.”

Finally, I cannot agree with the majority’s interpretation of the statute or with its conclusion concerning the legislative intent. I fail to see why it was necessary to engage in a discussion concerning the last antecedent rule of statutory construction and ignore authority which considered a statute containing the same language. In Standard Oil Co. v. Department of Finance (1943), 383 Ill. 136, 141, it was held that a tax “imposed upon persons engaged in the business of selling tangible personal property at retail in this State” referred to the occupation rather than to the sales. Had the General Assembly intended to limit the applicability of the tax to those messages transmitted in intrastate commerce it would have been a simple matter to do so.

Furthermore, I cannot agree with the majority’s conclusion that this is a “contracting” form of tax statute. Most taxpayers have encountered expanding forms of tax statutes, but a tax statute allegedly intended to contract the scope of its applicability is, indeed, rarely to be found. The justification for the contracting statute theory is that it “saves the statute from invalidity in the event Federal law were held to preclude taxation of some of the intrastate services incorporated into the first sentence of section 2.” (93 Ill. 2d at 254-55.) There is, of course, no authority cited in support of this statement for the obvious reason that there is none. In the face of a trend over a 50-year-period to expand the scope of permissible State taxation it appears unduly speculative to surmise that the General Assembly might have anticipated the imposition of a restriction which would limit the scope of its authority to impose a tax on the activity of the taxpayer.

These cases should not be decided in a vacuum. The only common sense reading of the statute is that the General Assembly wished to extend the scope of the tax to the extent constitutionally permissible. It is unfortunate that the failure to promulgate appropriate regulations permits the taxpayer to escape payment of the tax.