Appeal from the Circuit Court of Cook County; the Hon. Samuel
B. Epstein, Judge, presiding.
MR. JUSTICE RYAN DELIVERED THE OPINION OF THE COURT:
This case involves the validity of the provision of section 21 of the inheritance and transfer tax act (Ill. Rev. Stat. 1973, ch. 120, par. 394) which authorizes the county treasurer to retain and pay into the county treasury 4% of all taxes paid to him for the State of Illinois under the Act. The suit was filed by two plaintiffs as a class action on behalf of all taxpayers of Illinois who reside outside of Cook County. It was brought against Edward J. Rosewell, county treasurer and ex officio county collector of Cook County, and the County of Cook. The circuit court of Cook County held that the withholding by the county treasurer of 4% of the amount of the tax collected constitutes fees and violates the provisions of article VII, section 9(a), of the Constitution of 1970. The order of the circuit court directed the county treasurer to segregate and retain in a special fund the monies held by him under the Act. Plaintiffs purport to represent a class of all taxpayers of Illinois who reside outside of Cook County. Inasmuch as several counties in addition to Cook also withhold 4% of the amount of the inheritance tax collected, the class as defined in this manner may be too broadly stated. Since, however, there remains a smaller class of taxpayers within this broader classification who may properly object to the practice of withholding the statutory 4% we conclude that the possible overstatement of the size of the class is not important in this proceeding but may warrant consideration in subsequent hearings in this case upon remand.
The section of the Constitution of 1970 in question provides:
"Section 9. SALARIES AND FEES
(a) Compensation of officers and employees and the office expenses of units of local government shall not be paid from fees collected. Fees may be collected as provided by law and by ordinance and shall be deposited upon receipt with the treasurer of the unit. Fees shall not be based upon funds disbursed or collected, nor upon the levy or extension of taxes."
The appeal was directly to this court under the provisions of our Rule 302(a) (58 Ill.2d R. 302(a)).
The defendants contend that the withholding of 4% of the tax collected does not constitute a fee within the meaning of the proscription of article VII, section 9(a), of the Constitution of 1970, but instead constitutes a legislatively mandated distribution to the counties of tax revenues. We do not agree and accordingly affirm the decision of the circuit court of Cook County.
Prior to 1915 section 21 of the Act provided:
"The treasurer of each county shall be allowed to retain two per cent of all taxes paid and accounted for by him under this Act in full for his services in collecting and paying the same, in addition to his salary or fees now allowed by law." (Emphasis added.) (Laws of 1909, at 319.)
This section was held unconstitutional because it allowed the treasurer to receive compensation in excess of his statutory salary in violation of article X, section 9, of the 1870 Constitution. (Jones v. O'Connell, 266 Ill. 443.) It was contended in Jones that the 2% which section 21 provided be retained by the county treasurer should be applied to the payment of his salary and any excess above the amount of the salary should be paid into the county treasury as provided by section 9 of article X of the Constitution of 1870. This court in Jones rejected that contention because of the specific language of section 21 which provided that the county treasurer should retain the 2% in addition to his salary or fees allowed by law.
In 1915 the General Assembly reenacted the section in language identical to the present act, except instead of the withholding of 4% as is now provided the enactment in 1915 provided for a withholding of 2%. The present act provides:
"The treasurer of each county shall retain and pay into the county treasury 4% on all taxes paid and accounted for by him under this Act, in full for all services and expenses rendered, incurred or paid by the county or any of its officers, agents, or employees, in collecting and paying the same." (Ill. Rev. Stat. 1973, ch. 120, par. 394.)
The defendants argue that the provision of the reenactment requiring the county treasurer to retain and "pay into the county treasury" 4% of the tax paid to him removed these amounts from earnings of the county treasurer's office out of which salaries of his office were to be paid under article X, section 9, of the 1870 Constitution and therefore were not fees. Defendants contend that the section constitutes a direction to distribute State funds to the counties. We do not accept this argument. It was not the purpose of the General Assembly in reenacting section 21 to provide for a method of distributing State revenues to the counties. The purpose of the enactment was to give to the counties and not the State, as provided in Jones, the fees earned by the county treasurer in the collection of the taxes under the Act.
The sums retained by the county treasurer in the collection of the tax have been traditionally considered fees or commissions earned by the collection of the tax based on the amount collected. (Jones v. O'Connell; County of Lake v. Westerfield, 268 Ill. 537; 1912 Ill. Att'y Gen. Biennial Rep. 226.) The language of the reenactment does not change this concept. It specifically provides that the amount retained shall be paid into the county treasury "in full for all services and expenses rendered, incurred or paid by the county or any of its officers, agents, or employees, in collecting and paying the same." This ...