APPEAL from the Circuit Court of Cook County; the Hon. EARL
ARKISS, Judge, presiding.
MR. JUSTICE O'CONNOR DELIVERED THE OPINION OF THE COURT:
This action was brought by the People of the State of Illinois against International Business Machines Corporation (IBM) for nonpayment of 1976 Cook County personal property taxes in the amount of $2,595,394.86. The amount sought in this action was the difference between the total amount billed IBM for its 1976 personal property taxes and the amount IBM paid. After a hearing, the trial court entered judgment in favor of IBM. The State appeals, contending that (1) the trial court's finding of constructive fraud in IBM's 1976 personal property tax assessment was erroneous and unsupported by clear and convincing evidence, and (2) the trial court incorrectly ruled that the assessor was bound by its own auditing instructions in assessing IBM's personalty.
The parties stipulated to the admission of certain facts and various documents into evidence. The following facts were stipulated and deemed admitted:
(1) For the years 1972-1976, defendant timely filed its corporate personal property tax return, duly executed under oath, with the Cook County Assessor.
(2) Said tax returns showed valuations for all classes of personal property owned by defendant and located, or having a business situs in Cook County, Illinois.
(3) For 1976, the Cook County Assessor entered assessed valuations for all classes of personal property at defendant's locations precisely in the amounts set forth on defendant's return, except that the Assessor increased the value of defendant's machinery and equipment reported at One IBM Plaza, Chicago, from the value of $26,709,080 set forth on the return to an assessed value, before equalization, of $47,376,414, an increase of $20,667,334.
(4) Defendant timely filed a complaint with the Board of Appeals of Cook County with regard to the 1976 assessment.
(5) After a hearing, the Board of Appeals of Cook County denied defendant relief.
(6) The value of defendant's machinery and equipment located at One IBM Plaza as reported by it on its 1976 personal property tax return was determined in accordance with the 1976 Rules of Valuation published by the Cook County Assessor.
(7) The 1976 Rules of Valuation published by the Cook County Assessor provided in relevant part: "Depreciable assets, Items Nos. 8 and 10 should be reported at 35% of Net book value (Net book value is determined by deducting accumulated depreciation from original cost.) Assets depreciated to less 20% of their original value should be reported at 20% as long as they possess some degree of utility to the owner."
(8) For 1976, the Cook County Assessor entered an assessed value for defendant's machinery and equipment at One IBM Plaza at approximately 62 percent of its net book value.
(9) Defendant has paid personal property taxes to the Cook County Collector for 1976 in the amount of $3,591,925.68 on account of personal property assessed at One IBM Plaza, Chicago.
The following documents were among the various documents the parties agreed to ...