284 Ill. App. 3d 326 | Ill. App. Ct. | 1996
No. 3--96--0189
_________________________________________________________________
IN THE APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 1996
CHICAGO SMSA Limited Partnership, )
ILLINOIS SMSA Limited Partnership, )
CYBERTEL CELLULAR TELEPHONE )
COMPANY, and ILLINOIS RSA 6 & 7 )
Limited Partnership, ) Petition for Review of an
) Order of the Illinois
Petitioners-Appellants, ) Commerce Commission
)
v. ) No. 95-0049
)
ILLINOIS COMMERCE COMMISSION, )
)
Respondents-Appellees. )
_________________________________________________________________
PRESIDING JUSTICE BRESLIN delivered the opinion of the court:
_________________________________________________________________
The petitioners, Chicago SMSA limited Partnership, Illinois
SMSA Limited Partnership, Cybertel Cellular Telephone Company, and
Illinois RSA 6 & 7 Limited Partnership (petitioners), appeal an
order of the Illinois Commerce Commission (Commission) which
determined that they were required to pay the public utility tax on
revenues generated by their provision of cellular telephone
services. We hold that under the plain language of the tax
statute, the petitioners have no taxable revenue. Therefore, we
reverse.
The petitioners provide wireless telecommunication services
under the Ameritech brand name. Although providers of these
services were formerly required to file tariffs with the Commission
for the services they provide, the Commission excused Chicago SMSA
Limited Partnership from the tariff filing requirement in 1987 by
exercising its rulemaking authority pursuant to section 13-203 of
the Public Utilities Act (Act) (220 ILCS 5/13-203 (West 1994)).
However, the Commission pointed out in its order that Chicago SMSA
Limited Partnership would continue to be subject to the remaining
provisions of the Act, including the public utility tax requirement
of section 2-202 (220 ILCS 5/2-202 (West 1994)). In subsequent
rulemaking proceedings, the Commission granted the same exemption
to the remaining petitioners. See 83 Ill. Adm. Code §760.20 (1992);
83 Ill. Adm. Code §760.10 (1987).
In 1995, the petitioners filed estimated gross revenue returns
showing that no revenues would be subject to the tax. The
Commission responded by issuing a citation order which required the
petitioners to show cause why the Commission should not take action
to enforce section 2-202 of the Act. Because there was no factual
dispute, no evidentiary hearing was held and the parties submitted
briefs on the issue of whether the public utility tax applied to
the petitioners' revenues.
In a proposed order, the Commission hearing examiner pointed
out that utilities are only required to pay tax on revenues
collected pursuant to rates that the utility is required to file
with the Commission. Because the petitioners were no longer
required to file any rates, the hearing officer concluded that they
had no revenue for purposes of the public utility tax. The
Commission, however, rejected the proposed order. The Commission
observed that the original order excusing Chicago SMSA Limited
Partnership from the tariff filing requirement specifically stated
that the carrier would continue to be subject to the public utility
tax requirement of section 2-202 of the Act. In addition, the
Commission concluded that the petitioners must pay the public
utility tax because the policy statement in section 2-202 provides
that regulated utilities should bear the cost of regulation. After
the Commission denied their petition for rehearing, the petitioners
filed this appeal.
The issue on appeal is whether the Commission properly
interpreted section 2-202 of the Act.
When interpreting a statute, a court's primary objective is to
ascertain and give effect to the intent of the legislature, and
that intent is best evidenced by the language used by the
legislature. Thomas M. Madden & Co. v. Department of Revenue, 272
Ill. App. 3d 212, 651 N.E.2d 218 (1995). The interpretation of a
statute by an agency charged with its administration is accorded
deference, but it is not binding on the appellate court. Parisi v.
Jenkins, 236 Ill. App. 3d 42, 603 N.E.2d 566 (1992). Although a
policy declaration may be used to clarify ambiguous provisions of
a statute, it may not be used to create ambiguity where none
exists. Illinois Independent Telephone Association v. Illinois
Commerce Commission, 183 Ill. App. 3d 220, 539 N.E.2d 717 (1988).
Under section 2-202 of the Act, utilities are required to pay
a tax equal to a percentage of their gross revenues. According to
section 3-121 of the Act:
As used in Section 2-202 of this Act, the term "gross
revenue" includes all revenue which (1) is collected by
a public utility subject to regulation under this Act (a)
pursuant to the rates, other charges, and classifications
which it is required to file under Section 9-102 of this
Act ***. 220 ILCS 5/3-121 (West 1994).
Once the Commission excused the petitioners from the Act's
tariff filing requirements, the revenue generated by the
petitioners' cellular telephone services was not collected pursuant
to a rate or classification which the petitioners were required to
file under the Act. Therefore, such revenue cannot be considered
gross revenue for purposes of section 2-202. Because the
petitioners' services do not generate any "gross revenue" as that
term is defined in section 3-121, it is clear that they have no tax
liability under section 2-202 of the Act. Accordingly, we hold
that the petitioners are not obligated to pay public utility tax on
the revenue generated by their cellular telephone services.
The Commission points out, however, that when it excused
Chicago SMSA Limited Partnership from the tariff filing requirement
in 1987, it made clear in its order that the carrier would continue
to be subject to the public utility tax requirement of section 2-
202 of the Act. According to the Commission, this determination
also applies to the remaining petitioners because the Commission
granted their request to be included within the scope of the 1987
order. Thus, the Commission contends that the issue of the
petitioners' tax liability under section 2-202 has been previously
determined and cannot be relitigated in this case. We disagree.
The Commission's 1987 order provided that the petitioners were
bound by the public utility tax requirement of section 2-202.
However, it did not address the issue of whether the petitioners'
revenues would be considered gross revenue for purposes of that
section. Thus, the issue on appeal in the instant case was not
resolved in the 1987 order. Accordingly, we reject the
Commission's argument.
The Commission also claims that the petitioners are subject to
the public utility tax because the policy statement in section 2-
202 provides that utilities subject to regulation should bear the
cost of regulation. However, it is well settled that policy
declarations may only be used to clarify ambiguous provisions of a
statute. Illinois Independent Telephone Association v. Illinois
Commerce Commission, 183 Ill. App. 3d 220, 539 N.E.2d 717 (1988).
Since the Commission cannot point to any ambiguity in section 2-202
or 3-121, the policy statement is not a proper basis for imposing
tax liability on the petitioners.
The petitioners have also raised other grounds for reversing
the Commission's ruling in this case. However, because we have
reversed on the above grounds, we need not address these
contentions.
For the foregoing reasons, the decision of the Illinois
Commerce Commission is reversed.
Reversed.
HOLDRIDGE, P.J., and LYTTON, J., concur.
