20 N.E.2d 277 | Ill. | 1939
The issue is whether the provisions of the Retailers' Occupation Tax act apply to manufacturers and distributors of printing ink. Plaintiffs filed a class suit in the circuit court of Cook county to enjoin the Director of Finance and the Attorney General from requiring them and others similarly situated to pay such a tax on sales of printing ink. *218 The bill also sought to restrain application of certain rules and regulations of the Department of Finance. The circuit court denied the injunction and dismissed the bill for want of equity. The appeal comes directly to this court because the revenue is involved and the State is an interested party.
Plaintiffs are engaged in the business of manufacturing and selling ink to printers and lithographers (1) for the printing of standard and salable articles of commercial value, and (2) for the printing and lithographing of material on special order which, when completed, is of no value except to the persons for whom the work is done. When the Retailers' Occupation Tax act went into effect in July, 1933, the Department of Finance ruled that the sale of ink to printers and lithographers for either of these purposes did not subject the business of plaintiffs to a tax under the act. In October, 1936, the department amended its rule (36) to make plaintiffs liable for a tax measured by receipts from the sale of ink used in the second class of printing and lithographing enumerated above, which it designated as printed matter of no commercial value. The bill of complaint alleges that the Director of Finance and the Attorney General threaten to sue plaintiffs to recover a tax measured by such receipts from July 1, 1933, to the present time, and to apply in said suits article 14 and rule 23 of the rules and regulations of the Department of Finance.
The first question is whether sales of printing ink by these manufacturers to printers and lithographers are sales at retail within the meaning of the act. Section 1 defines a "sale at retail" as "any transfer of the ownership of, or title to, tangible personal property to the purchaser, for use or consumption and not for resale in any form as tangible personal property, for valuable consideration." The contention of the printing ink companies is that the ink sold to printers and lithographers is not used or consumed but *219
is resold in another form as an integral part of the printed matter. The act cannot be so narrowly construed. The printers and lithographers are the users or consumers of the printing ink in the production of printed matter. In Herlihy Mid-Continent Co. v.Nudelman,
It is further claimed that printing ink companies are not subject to the occupation tax because they are engaged in a highly specialized service similar to optometry (Babcock v.Nudelman,
In paragraphs 3 to 7, inclusive, of the complaint, plaintiffs described, in detail, the types of printing executed by the printers and lithographers to whom they sell printing ink. They ask us to decide which of these products are of commercial value and which are of non-commercial value. There is no occasion to consider that question in this suit. The Department of Finance and the Attorney General threaten to assess a tax on plaintiffs' business measured *221 only by the sales of printing ink used for production of material of non-commercial value. This we have found they are entitled to do. If, in making the assessment, nontaxable sales are included, the statute provides a remedy for the printing ink companies. (Ill. Rev. Stat. 1937, chap. 120, par. 451.) This court cannot anticipate that the Department of Finance will violate the law. The questions raised by these paragraphs of the complaint are prematurely presented for judicial decision.
Article 14 and rule 23, both promulgated pursuant to the power of the Department of Finance to issue necessary rules and regulations, are also sought to be enjoined. These rules have been set up by the department to assist in determining the amount of tax to be assessed against occupations within the scope of the act. While it was stipulated by the department that no occupation taxes were due from plaintiffs prior to October, 1936, yet no assessment has been made against any of the companies since that time. They have sustained no injuries as a result of the rules complained of. Should the rules be arbitrarily and unreasonably applied by the Director of Finance in the making of assessments, the remedy provided by the statute is adequate. The act provides for the review of all questions of law and fact by certiorari to the circuit and superior courts. (Ill. Rev. Stat. 1937, chap. 120, par. 451.) Where the statutory remedy offers opportunity for adequate relief it must be exhausted before equity will act.(Bistor v. McDonough,
The decree is affirmed.
Decree affirmed. *222