2018 IL App (1st) 170875
Ill. App. Ct.2019Background
- In 2016 Chicago enacted an "Other Tobacco Products" ordinance imposing per‑unit (flat) taxes on non‑cigarette tobacco products (e.g., little/large cigars, pipe, smokeless tobacco).
- Plaintiffs (tobacco retailers and trade groups) sued for declaratory and injunctive relief, arguing the ordinance is preempted by 65 ILCS 5/8‑11‑6a(2).
- Section 8‑11‑6a(2) permits home‑rule municipalities a tax "based on the number of units of cigarettes or tobacco products" but adds: a municipality that had not imposed such a tax before July 1, 1993, "shall not impose such a tax after that date."
- Parties agreed Chicago had a cigarette tax before July 1, 1993 but had not taxed non‑cigarette "tobacco products" before that date.
- The trial court granted plaintiffs' partial summary judgment, holding the statute preempted Chicago from imposing a units‑based tax on non‑cigarette tobacco products; Chicago appealed.
- The appellate court reversed, interpreting the statute to require only that a home‑rule municipality have had "a tax" on either cigarettes or tobacco products before July 1, 1993; because Chicago taxed cigarettes pre‑1993, the city may now tax other tobacco products.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 65 ILCS 5/8‑11‑6a(2) preempts Chicago from imposing a units‑based tax on non‑cigarette "tobacco products" | The phrase "such a tax" refers to a tax on "tobacco products" specifically; because Chicago did not tax non‑cigarette tobacco products before July 1, 1993, it cannot impose one now | The statute allows a municipality to have had "a tax" on either cigarettes or tobacco products before July 1, 1993; Chicago’s pre‑1993 cigarette tax satisfies the condition, so it may now tax other tobacco products | Reversed trial court: statue read in context permits Chicago to impose the units‑based tax on other tobacco products because it taxed cigarettes before July 1, 1993 |
Key Cases Cited
- City of Chicago v. StubHub, 2011 IL 111127 (discusses breadth of home‑rule powers under the Illinois Constitution)
- Palm v. 2800 Lake Shore Drive Condominium Ass’n, 2013 IL 110505 (statutory limits on home‑rule taxing authority and liberal construction of home‑rule powers)
- Apex Oil Co. v. Henkhaus, 118 Ill. App. 3d 273 (appellate court alters literal disjunctive "or" to reflect legislative intent)
- Thoman v. Village of Northbrook, 148 Ill. App. 3d 356 (contextual construction can render "or" inclusive to effectuate legislative purpose)
- People v. Frieberg, 147 Ill. 2d 326 (general proposition on ordinary sense of "or" in statutory interpretation)