APPEAL from the Circuit Court of Kane County; the Hon. ERNEST
W. AKEMANN, Judge, presiding.
MR. JUSTICE SEIDENFELD DELIVERED THE OPINION OF THE COURT:
The plaintiff, a private club, sought administrative review of a final assessment of retailers' occupation tax deficiency in the amount of $1847.46 plus penalties and interest based upon the monthly minimum charges that the Club had billed its members for its restaurant facility. The circuit court reversed the determination of the defendant, the Department of Revenue. The defendant appeals, contending that the unused portion of the minimum charge was a sale at retail and therefore was taxable under sections 1 and 2 of the Retailers' Occupation Tax Act (Ill. Rev. Stat. 1975, ch. 120, pars. 440, 441).
Section 2 of the Act states as pertinent:
"A tax is imposed upon persons engaged in the business of selling tangible personal property at retail at the rate of [a percentage] of the gross receipts from such sales of tangible personal property made in the course of such business * * *."
Section 1, as applicable, defines "Sale at retail":
"`Sale at retail' means any transfer of the ownership of or title to tangible personal property to a purchaser, for the purpose of use or consumption, * * * for a valuable consideration.
`Selling price' or the `amount of sale' means the consideration for a sale valued in money whether received in money or otherwise, * * *.
`Gross receipts' from the sales of tangible personal property at retail means the total selling price or the amount of such sales, * * *."
The Department based its assessment of additional tax liability on Rule 7 of the retailers' occupation tax rules and regulations, stating in part:
"3. COVER CHARGES AND MINIMUM CHARGES
Cover charges are not included in the taxable receipts of persons operating restaurants, hotels and other places of business which come within the Act, where such cover charges are made exclusively for the privilege of occupying space within such public eating place, and where the payment of a cover charge by a patron does not entitle such patron to use or consume any food or beverage or other tangible personal property.
In such an instance, the cover charge is a receipt on account of a service rendered, whether such service be entertainment or otherwise, and does not accrue on account of the sale of tangible personal property at retail.
The preceding statement does not apply to so-called `minimum charges' made by night clubs or public eating places, the entire amount of which receipts is within the Act."
Both the Department and the Club agree that the rules and regulations promulgated by the Department, while instructive, are not binding upon this court in reviewing the meaning and intent of the statute. (See Terrace Carpet Co. v. Department of Revenue, 46 Ill. App.3d 84, 90 (1977).) The Club argues that the rule is persuasive to the extent that it reflects the Department's interpretation of the statute, which does not enumerate all matters considered as a sale, and by indicating that only minimum charges made by nightclubs or public eating places are taxable under the Act. The Club suggests that under the rule the minimum charges are those related to a particular ...