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Chicago SMSA Ltd. Partnership v. Illinois Commerce Commission
Citations: 284 Ill. App. 3d 326; 672 N.E.2d 37Docket: 3-96-0189
Court: Appellate Court of Illinois; October 16, 1996; Illinois; State Appellate Court
In case No. 3--96--0189, the Illinois Appellate Court reviewed an order from the Illinois Commerce Commission (Commission) requiring Chicago SMSA Limited Partnership and other petitioners to pay a public utility tax on revenues from their cellular services. The court found that under the relevant tax statute, the petitioners had no taxable revenue, thus reversing the Commission's order. The petitioners, providing wireless services under the Ameritech brand, were previously exempted from filing tariffs by the Commission in 1987, although they remained subject to other provisions of the Public Utilities Act, including the public utility tax. In 1995, the petitioners submitted returns indicating no taxable revenues, prompting the Commission to issue a citation order demanding justification for not complying with the tax requirement. The Commission's hearing examiner proposed that since the petitioners were not required to file rates, they had no taxable revenue. However, the Commission rejected this view, citing their earlier ruling and asserting that utilities should bear regulatory costs. The petitioners appealed the Commission's interpretation of section 2-202 of the Act. The appellate court emphasized that statutory interpretation aims to reflect legislative intent as evident in the statute's language, and while agency interpretations are respected, they are not binding on courts. The court also noted that policy declarations cannot create ambiguity in clear statutory provisions. Utilities are mandated by section 2-202 of the Act to pay a tax based on a percentage of their gross revenues, as defined in section 3-121. The term "gross revenue" encompasses all revenue collected by regulated public utilities under rates and classifications filed according to section 9-102. The petitioners, whose cellular telephone services were exempted from tariff filing by the Commission, did not collect revenue under a required rate or classification. Consequently, this revenue does not qualify as gross revenue under section 3-121, resulting in no tax liability under section 2-202. The Commission argued that the 1987 order, which exempted Chicago SMSA Limited Partnership from tariff filing, affirmed the public utility tax requirement for all petitioners included in that order. However, the 1987 order did not address whether the petitioners' revenues were considered gross revenue, leaving the current issue unresolved. Furthermore, the Commission's assertion that petitioners are subject to the tax based on a policy statement in section 2-202 was rejected, as policy statements only clarify ambiguities in statutes, and no ambiguity was found in the relevant sections. The petitioners presented additional arguments against the Commission's ruling, but these were rendered unnecessary by the reversal based on the primary findings. Consequently, the Illinois Commerce Commission's decision is reversed.