APPEAL from the Circuit Court of Champaign County; the Hon.
HAROLD L. JENSEN, Judge, presiding.
MR. JUSTICE WEBBER DELIVERED THE OPINION OF THE COURT:
This appeal concerns the actions of the Department of Revenue of the State of Illinois (Department) to correct and reallocate taxes collected by it on behalf of the City of Champaign (City) and the County of Champaign (County) under the Retailers' Occupation Tax Act (Ill. Rev. Stat. 1979, ch. 120, par. 440 et seq.). Cities (Ill. Rev. Stat. 1979, ch. 24, par. 8-11-1) and counties (Ill. Rev. Stat. 1979, ch. 34, par. 409.1) are permitted to impose a tax in addition to the tax imposed by the State. The tax imposed by the municipalities and counties is collected, administered and enforced by the Department, which periodically remits to the municipalities and counties their share of the collections, less an amount payable to the State to compensate it for its collection and administrative costs.
The Department had been collecting and remitting for both the City and the County. An audit revealed that two commercial enterprises were located in reality in the County and not in the City. For about five years prior to January 1980, taxes collected on account of these establishments had been remitted to the City in the total amount of $479,718.41. By letter, dated January 18, 1980, addressed to the City and the County, the Department proposed to adjust this amount over a period of 36 months by deducting from current payments to the City the sum of $13,300 per month for 35 months and $14,218.41 for one month. The same amounts would be paid to the County at the same times.
Following receipt of this letter, the City filed suit in the circuit court of Champaign County against the County and the Department. The suit sought a temporary and permanent injunction, declaratory judgment, and administrative review or certiorari. If any of the relief were granted, the net effect would be to allow the City to retain the $479,718.41 already paid to it, but to allow future payments on account of the two establishments located in the County to be paid to it.
The County filed a motion to dismiss under section 45 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 45). Although the record is not entirely clear on the point, it seems assumed by the parties that the Department, through the Attorney General of Illinois, joined in the motion. Memoranda of law were submitted to the trial court by the City and the County. After argument on the motion, the trial court dismissed the counts of the complaint seeking injunctive relief and administrative review or certiorari and declared the rights of the parties under section 57.1 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 57.1) as follows: that the Department's actions were not unconstitutional nor unlawful, and that the Department may not be limited in its adjustment and reallocation of taxes to the current fiscal year. The City appeals, and we affirm.
On appeal four principal issues are raised: (1) the power of the Department to adjust future tax payments in order to correct past errors, (2) the time within which such adjustments of past errors may be made, assuming the power to adjust exits, (3) the necessity of the adoption of rules by the Department before any adjustments may be made, and (4) the lack of administrative review or certiorai in these proceedings.
As to the first issue: there is no dispute that the amount of tax involved is correct nor is there any dispute that the establishments generating the tax are physically located in the County rather than in the City. There is some dispute as to whose obligation it was to determine the precise location of these establishments. The statute involved is section 39b32 of the Civil Administrative Code of Illinois (Ill. Rev. Stat. 1979, ch. 127, par. 39b32), which reads as follows:
"When the Department, through its own error, has entered State tax on its records under the wrong designation (such as recording a use tax payment as retailers' occupation tax, or a retailers' occupation tax payment as use tax, etc.), to correct such error on its records and to notify the State Treasurer of the change so that he can make the necessary corresponding changes in his records in case the erroneous entry has been made in his records. If the erroneous entry in the Department's records is due to a mistake in reporting by the taxpayer and the taxpayer agrees that he has made a reporting error which should be corrected, the Department may correct its records accordingly and notify the State Treasurer of the change so that he can make the necessary corresponding changes in his records in case the erroneous entry has been made in his records. The Department may similarly correct errors in the distribution, as between municipalities and counties, of taxes which are imposed by such municipalities and counties but collected for them by the Department as agent, and errors by which State taxes are erroneously credited as municipal or county tax or by which municipal or county taxes are erroneously credited or recorded as State tax, giving such notices to the State Treasurer as may be necessary to enable him to make corresponding corrections in his records."
As will be noted, the first two sentences of the statute deal with correction of records. The City's first argument is that the word "similarly" which is used in the third sentence limits the power of the Department to the correction of records only. Stated another way, the argument is that the first two sentences refer to past errors and "similarly" limits the third sentence to the same subject matter; therefore, the Department under the third sentence may only correct prospective errors in records. We believe that such an argument is contrary to logic and to the plain wording of the statute.
Any correction would necessarily be of something which has already occurred. One cannot correct a thing which has not yet happened, and if a proper correction has been made, nothing would be necessary in the future unless there is a change of fact or of status. A "fact" is "a thing done." (Webster's New International Dictionary 908 (2d ed. 1934).) A correction of fact must by its nature be retrospective in character.
Of equal importance is the language of the statute itself. The first two sentences speak of correction of records. The third sentence which is at issue here speaks of corrections in distribution. Tax money is considered "distributed" when there has been an actual delivery of it to those entitled to it. People v. Dime Savings Bank (1932), 350 Ill. 503, 183 N.E. 604.
Thus the statute is aimed at either of two events which have occurred in the past: (1) the correction of a record — there could be no correction unless a record had already been made; or (2) the correction in a distribution — there could be no correction unless there had already been a past event, distribution (Dime Savings Bank). The City's argument that the statute is prospective only cannot stand.
The City next argues public policy, viz., that it would be against public policy to require it to refund the tax monies (improperly paid over to it since it has relied on them in preparing its budget and providing for its services.
• 1 At the outset, it must be noted that there is nothing before this court on the subject of the City's financial picture except references in its brief. These are insufficient and will be disregarded. Town of ...