APPEAL from the Superior Court of Cook County; the Hon. JOHN
F. HAAS, Judge, presiding.
MR. JUSTICE MAXWELL DELIVERED THE OPINION OF THE COURT:
Rehearing denied November 17, 1952.
This is a direct appeal by the defendants, Department of Revenue of the State of Illinois and the Attorney General, from a decree of the superior court of Cook County, entered in a proceeding for a declaratory judgment, holding the Illinois Cigarette Use Tax Act unconstitutional, and permanently enjoining defendants from enforcing it against plaintiff, Julie Johnson, and all other persons similarly situated.
The fundamental issues presented herein are whether the Illinois Cigarette Use Tax Act, which purports to impose a tax on the privilege of using cigarettes in this State regardless of where such cigarettes are acquired by the user, contravenes the commerce clause of the Federal constitution, or violates the provisions of the revenue article of the constitution of the State of Illinois. The court will also determine the propriety of the class action, and whether the statute infringes any of the other provisions of the Illinois constitution, as alleged by plaintiff.
The uncontroverted facts are that plaintiff, an Illinois resident, purchased for her own use three cartons of cigarettes from a cigarette mail-order vendor in Hammond, Indiana, by placing an order in the mail at Chicago, and prepaying the purchase price and return delivery postage. The Indiana vendor filled the order, and the cigarettes were received and used by plaintiff without the Illinois cigarette tax stamp affixed thereto. Plaintiff thereupon instituted this class action for a declaratory judgment as to the constitutionality of the Illinois Cigarette Use Tax Act, and for a temporary and permanent injunction against the enforcement of the act by defendants against herself and all persons similarly situated. The superior court, without assigning any specific reason, held the act unconstitutional, and defendants have appealed directly to this court on the ground that constitutional questions and public revenue are involved.
Before adjudicating the constitutional issues we shall consider defendants' contention that this tax suit was improperly brought as a class action. Although class suits were maintained in the tax cases of Babcock v. Elliott, 403 Ill. 329, and Johnson v. Daley, 403 Ill. 338, inasmuch as the courts therein did not pass upon the propriety of the class action, those decisions are not determinative of this issue.
In support of their contention that the action was improperly brought defendants have cited People's Store of Roseland v. McKibbin, 379 Ill. 148, which involved a class action for reimbursement for taxes paid as well as to restrain the collection of taxes on certain sales. The court predicated its rejection of the use of the class action therein on the ground that while all retailers of the State, engaged in selling food supplies of the kind sold by plaintiff, had an interest in having their sales exempted, nevertheless, a decision declaring the sales exempt would not create a fund from which reimbursement could be made, nor establish the existence of a right to recover by each vendor of the class, each of whom must make his own proof, wholly unrelated to all others. The court stated that class litigation may be sustained where all members of the class have a common interest in the questions involved and in the results obtained.
Inasmuch as all members of the class to which plaintiff herein belongs individual purchasers of cigarettes, for their own use, from out-of-State vendors have a common interest in the constitutionality of the statute, and since the result of that determination would affect them all identically in that they would, or would not, be subject to the enforcement of the law, a class action could properly be maintained herein.
In determining the constitutionality of the Illinois Cigarette Use Tax Act, it is essential initially to review its salient provisions. The act is entitled: "AN ACT in relation to a tax upon the privilege of using cigarettes in this State." It provides for a tax on the privilege of using cigarettes in Illinois at the rate of one and one-half mills per cigarette, or three cents per package, or thirty cents per carton. Illinois distributors who are subject to the State's jurisdiction are required to collect the cigarette use tax by adding it to the price of the cigarettes. (Ill. Rev. Stat. 1951, chap. 120, par. 453.33,) and Illinois users who acquire cigarettes in tax free channels, in or out of Illinois, must remit the use tax directly to the Illinois Department of Revenue with a duplicate invoice. Ill. Rev. Stat. 1951, chap. 120, par. 453.42.
There are, in addition, certain offset provisions applicable to Illinois distributors in their capacity as tax collectors of the use tax. The purchase of stamps from the State is the means by which distributors remit cigarette taxes, and under the offset provisions the Illinois distributor is excused from purchasing and affixing a use tax stamp where he is required by the Illinois Cigarette Tax Act to affix a tax stamp in the like amount to the same cigarettes. The effect of this provision in operation is that a distributor liable for the Illinois cigarette tax with respect to a given sale is not required to pay over to the State the use tax which he is obligated to collect from the consumer, but may keep the use tax only to the extent of a like amount of tax which he must pay on the same cigarettes under the Cigarette Tax Act.
It is an elemental canon of statutory construction that a party attacking the constitutionality of a statute has the burden of establishing that it contravenes or violates any constitutional provision. (Reif v. Barrett, 355 Ill. 104.) The fact that the State has never had any type of use tax, or that an administrative study group may have expressed doubt as to the practicability or constitutionality of a general use tax in Illinois, as pointed out by plaintiff, does not constitute legal grounds for invalidating a statute.
Plaintiff maintains that the provisions of the Illinois Cigarette Use Tax Act, which tax persons buying cigarettes from out-of-State vendors and require such persons to remit the tax and duplicate invoices directly to the Department of Revenue, as well as the omission in the act of a provision exempting "any activity in interstate commerce which may not under the Constitution and statutes of the United States be made the subject of taxation," constitute a direct burden on interstate commerce in contravention of the commerce clause of the Federal constitution.
In support thereof plaintiff cites Norton v. Department of Revenue, 340 U.S. 534, where the court held that the Illinois Department of Revenue could not collect a retailers' occupation tax on interstate transactions involving the shipment of property into Illinois from Massachusetts, since the tax would violate the commerce clause of the Federal constitution. The court, however, specifically distinguished the retailers' occupation from a use tax, on the ground that the impact of a use tax is on the local buyer or user, whereas the retailers' occupation tax fell on the vendor, hence the cases sustaining the constitutionality of use taxes were not determinative. Norton v. Department of Revenue, 340 U.S. at p. 537.
Similarly, in Spector Motor Service, Inc. v. O'Connor, 340 U.S. 602, also cited by plaintiff, the court distinguished the use tax cases in determining that a tax on the franchise of the petitioners to do an exclusively interstate business, contravened the commerce clause.
Nor do we deem Johnson v. Daley, 403 Ill. 338, cited by plaintiff, a determinative authority, inasmuch as the court in holding invalid an amendment to the Cigarette Tax Act which attempted to extend the occupation tax to distributors who imported cigarettes from outside the State, distinguished the operation of the tax from a use tax. The court stated at p. 344: "It will be observed that in effect it taxes the act of bringing or causing to be brought into this State the commodity described. Its ...