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Consolidated Distilled Products v. Mahin

OPINION FILED NOVEMBER 30, 1973.

CONSOLIDATED DISTILLED PRODUCTS, INC., ET AL., APPELLEES,

v.

GEORGE E, MAHIN, DIRECTOR OF REVENUE, ET AL., APPELLANTS.



Appeal from the Circuit Court of Cook County; the Hon. Nathan M. Cohen, Judge, presiding.

MR. JUSTICE SCHAEFER DELIVERED THE OPINION OF THE COURT:

This case involves an attack upon the Illinois Liquor Control Act which, after it was amended in 1953, imposed a privilege tax upon the distributors of wine made from grapes grown in Illinois at a lower rate than the rate at which that tax was imposed upon distributors of wine made from grapes grown outside of Illinois or from other fruits. (Ill. Rev. Stat. 1969, ch. 43, par. 158.) The plaintiffs, who assert the invalidity of the statute generally and as so amended, are distributors of wine made from products other than grapes grown in Illinois. They sue on their own behalf and on behalf of other distributors similarly situated. The defendants are the Director of Revenue and the State Treasurer. The relief sought was a judgment declaring the invalidity of the tax, an injunction to restrain its collection in the future and a refund of taxes paid during the pendency of the action.

Certain individuals, who alleged that they had purchased wine at retail and had borne the burden of the challenged tax which was included in the price they paid for the wine that they bought, were granted permission to intervene on their own behalf and on behalf of all purchasers. The circuit court of Cook County entered an order establishing a protest fund, directing the defendants to place all taxes thereafter paid into that fund, and enjoining them from disbursing the taxes so paid pending the outcome of this action. Public Act 77-295, effective July 15, 1971 (Ill. Rev. Stat. 1971, ch. 43, par. 158), amended the statute and eliminated the tax differential in favor of wine made from grapes grown in Illinois.

The trial court held that the tax differential had been unconstitutional but that the tax did not violate the import-export clause of the United States Constitution (art. I, sec. 10, cl. 2). The plaintiffs argue, however, that even the present nondiscriminatory tax may not be imposed on importers of foreign liquors. We think that the tax did not and does not violate the import-export clause.

This question requires an understanding of the relevant parts of the Liquor Control Act.

Section 1 of article VIII of the Act provides (Ill. Rev. Stat. 1971, ch. 43, par. 158):

"A tax is imposed upon the privilege of engaging in business * * * as an importing distributor of alcoholic liquor other than beer at the rate of 23 cents per gallon for wine containing 14% or less of alcohol by volume, [and] 60 cents per gallon for wine containing more than 14% of alcohol by volume, * * * sold or used by such importing distributor, or as agent for any other person."

Section 2.16 of article I of the Act provides (Ill. Rev. Stat. 1971, ch. 43, par. 95.16):

"`Importing distributor' means any person who imports into this State, from any point in the United States outside this State * * * any alcoholic liquors for sale or resale * * *."

Section 2.21 of article I of the Act provides (Ill. Rev. Stat. 1971, ch. 43, par. 95.21):

"`Sale' means any transfer, exchange or barter in any manner, or by any means whatsoever * * *. The term `sale' includes any transfer of alcoholic liquor from a foreign importer's license [sic] to an importing distributor's license [sic] even if both licenses are held by the same person."

Section 2.27 of article I of the Act provides (Ill. Rev. Stat. 1971, ch. 43, par. 95.27):

"`Foreign importer' means anyone who imports into this State, from any point outside the United States, any alcoholic liquors other than in bulk for ...


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