2019 IL 124469
Ill.2019Background
- In 2016 Chicago enacted an "other tobacco products" (OTP) ordinance taxing noncigarette tobacco: $1.80/oz for smoking/smokeless tobacco, $0.60/oz for pipe tobacco, $0.20 per cigar. The City deferred implementation pending litigation.
- Plaintiffs (tobacco-industry interests) sued for declaratory and injunctive relief, arguing the OTP tax is preempted by 65 ILCS 5/8-11-6a (Illinois Municipal Code), which limits home-rule taxing authority.
- Section 8-11-6a broadly preempts many home-rule taxes but contains an exemption allowing "a tax based on the number of units of cigarettes or tobacco products (provided, however, that a home rule municipality that has not imposed a tax ... before July 1, 1993, shall not impose such a tax after that date)."
- The Cook County circuit court granted plaintiffs’ partial summary judgment, holding the OTP tax preempted; the Illinois Appellate Court reversed; the Illinois Supreme Court granted leave and reversed the appellate court, affirming the circuit court.
- The Supreme Court construed the statute to mean municipalities may only continue (or have) unit-based cigarette or tobacco-product taxes that were in place before July 1, 1993; new municipal unit-based OTP taxes enacted after that date are preempted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 65 ILCS 5/8-11-6a preempts Chicago’s 2016 OTP unit-based tax | The statute bars municipal cigarette or other tobacco-product taxes unless the same tax existed before July 1, 1993; Chicago had not taxed OTPs pre-1993 so the 2016 OTP tax is preempted | The statute "grandfathers" municipalities that imposed any unit-based cigarette/tobacco tax pre-1993 (Chicago taxed cigarettes pre-1993), so Chicago may impose unit taxes on other tobacco products after 1993 | Held preempted: the statute permits only unit-based cigarette or tobacco-product taxes that were enacted before July 1, 1993; Chicago’s 2016 OTP tax is invalid |
| Whether the phrase "such a tax" modifies each listed item (separate cigarette tax vs separate tobacco-product tax) or the municipality’s status | "Such a tax" modifies each listed tax, so a municipality may not impose a cigarette tax or a tobacco-product tax after July 1, 1993 unless that specific tax existed before that date | The parenthetical addresses the municipality (which municipalities are "grandfathered"), not individual taxes; taxing one tobacco product pre-1993 allows taxing other tobacco products later | Held that the limiting clause restricts by tax: statute’s plain language and history show the cutoff bars municipalities from imposing new unit-based taxes on cigarettes or on other tobacco products unless that specific tax existed before July 1, 1993 |
| Role of legislative purpose/ history (protect state revenue, preserve jobs) | Legislative history shows the 1993 amendment sought to limit new local tobacco taxes to protect state tax revenue and jobs, supporting plaintiffs’ reading | City points to legislative history and repeated attempts to amend statute as ambiguous and argues inclusive reading is reasonable | Court relied on plain text together with legislative purpose to affirm the preemptive effect limiting new municipal unit-based tobacco taxes to pre-1993 taxes |
Key Cases Cited
- Palm v. Lake Shore Drive Condominium Ass'n, 2013 IL 110505 (explaining broad constitutional grant of home-rule powers)
- Oswald v. Hamer, 2018 IL 122203 (statutory construction and de novo review principles)
- Schillerstrom Homes, Inc. v. City of Naperville, 198 Ill. 2d 281 (2001) (state statute must contain specific language to preempt home-rule power)
- People v. Latona, 184 Ill. 2d 260 (1998) (avoid statutory constructions that defeat legislative purpose)
- Manago v. County of Cook, 2017 IL 121078 (Courts should not substitute their policy judgments for the legislature)
- Sperl v. Henry, 2018 IL 123132 (consider statute’s purpose and consequences when construing language)