The opinion of the court was delivered by: Marovitz, District Judge.
Cross-motions for Summary Judgment on Count I
This is an action for the refund of certain federal excise
taxes on telephone service alleged to have been overpaid since
and including the last quarter of 1965. In addition to the
alleged overpayments or overcollections, depending on one's
view, plaintiff seeks statutory interest.
The Complaint consists of three counts: Count I, brought by
Robert C. Agron, a subscriber to the telephone services of the
Illinois Bell Telephone Company (IBT), against the United
States raises the narrow, if perplexing, legal issue of the
taxability of certain amounts set forth on plaintiff's
telephone bill. Count II is brought as a class action by
plaintiff on behalf of all telephone subscribers similarly
situated. The Illinois Bell Telephone Company is joined as a
defendant in this count. Count III is brought not only on
behalf of all IBT subscribers, but also on behalf of IBT.
Presently pending before this Court are cross-motions for
summary judgment on Count I, IBT's motions for summary judgment
on Counts II and III, and the Government's motions to dismiss
Counts II and III. While Counts II and III raise jurisdictional
and procedural questions, the ultimate substantive issue in all
counts, the propriety of the challenged federal tax on
telephone service, is the same. We turn now to the
cross-motions for summary judgment on Count I. "(S)ummary
judgment is appropriate where, as here, there are no material
factual issues in dispute and only legal issues need be
resolved." Chicago Joint Board Amalgamated Clothing Workers of
America, A.F.L.-C.I.O. v. Chicago Tribune Co., 307 F. Supp. 422,
424 (N.D.Ill. 1969).
The Government, under 26 U.S.C. § 4251(a), imposes a
communications excise tax on persons who pay for local and toll
telephone service. Local and toll telephone service is defined
in the following section, 26 U.S.C. § 4252(a, b). Telephone
companies, such as IBT, are required to collect the federal
communications tax imposed on their subscribers under Section
4251. 26 U.S.C. § 4291.
On its bills to its customers, the IBT separately lists the
amount due on account of state and local taxes. See Complaint,
Ex. 2 to Ex. 1. The Government, through the IBT as its
collector or conduit, has been collecting its communications
services tax, currently at the rate of 10%, on the total of the
charges set forth for both telephone service and state and
local taxes. For instance, one IBT bill sent to plaintiff
provided in part:
Due to U.S.
Telephone Service 17 ...