Appeal from the Circuit Court of Tazewell County; the Hon.
John A. Gorman, Judge, presiding.
JUSTICE SCOTT DELIVERED THE OPINION OF THE COURT:
This case is before this court on the appeal of the Department of Revenue of the State of Illinois (the Department) from a judgment of the circuit court of Tazewell County which reversed an administrative decision imposing sales and use taxes on Central Illinois Light Company (CILCO) as to purchase of certain items which CILCO claims to be components for various pollution control facilities.
The facilities in question are a closed cycle cooling pond including a dam and pumphouse and an electronic scale at a dry ash collection facility.
On those purchases where CILCO was to have paid use tax directly to the Department, CILCO did not pay the tax because of its claim that the facilities in question were for pollution control and hence such purchases were tax exempt. On those purchases where CILCO paid use taxes to the supplier, the suppliers in turn paid an equal amount of tax to the Department. At CILCO's request each supplier issued CILCO an unconditional promissory note in the amount of the tax paid and at CILCO's expense and direction filed a claim for credit for the retailers' occupation tax. This procedure was followed in an effort to meet the requirement of the Retailers' Occupation Tax Act, which provides that a retailer may be granted a claim for credit or refund where it appears that the claimant has unconditionally repaid the purchaser any amount of tax collected from the purchaser. See Ill. Rev. Sat. 1981, ch. 120, par. 445.
A further recitation of facts will be set forth as they become pertinent to the determination of the issues presented in this appeal. We are mindful that in addition to CILCO there are other parties (suppliers) who are claiming a tax refund. In determining the issues presented in this appeal we will refer only to the claimant CILCO; however, the determination of the issues will apply to all claimants unless otherwise specified.
The Department argues that CILCO is not entitled to the tax exemption contained in section 2a of the Use Tax Act (Ill. Rev. Stat. 1979, ch. 120, par. 439.2a) because the Duck Creek Station cooling pond and the E.D. Edwards electronic truck scale do not qualify as pollution-control facilities.
Section 2a provide as follows:
"`Pollution control facilities' means any system, method, construction, device or appliance appurtenant thereto sold or used or intended for the primary purpose of eliminating, preventing, or reducing air and water pollution as the term `air pollution' or `water pollution' is defined in the `Environmental Protection Act,' enacted by the 76th General Assembly, or for the primary purpose of treating, pretreating, modifying, or disposing of any potential solid, liquid or gaseous pollutant which if released without such treatment, pretreatment, modification or disposal might be harmful, detrimental or offensive to human, plant or animal life, or to property. * * *." Ill. Rev. Stat. 1979, ch. 120, par. 439.2a.
Section 2a of the Use Tax Act has an identical counterpart in the Retailers' Occupation Tax Act. (See Ill. Rev. Stat. 1979, ch. 120, par. 440a.) The Revenue Act of 1939 also gives favored treatment to pollution control facilities in the property tax provisions of our Revenue Act of 1939. See Ill. Rev. Sat. 1979, ch. 120, par. 502a-1 et seq.
Another statutory provision pertinent to CILCO's claim for tax exemption is section 21a-5 of our Revenue Act of 1939, which provides as follows:
"Sec. 21a-5. Certification procedure. Application for a pollution control facility certificate shall be filed with the Pollution Control Board. The application shall be filed in such manner and in such form as may be prescribed by regulations issued by the Pollution Control Board, and shall contain appropriate and available descriptive information concerning anything claimed to be entitled in whole or in part to tax treatment as a pollution control facility as defined in this act. If it is found that the claimed facility or relevant portion thereof is a pollution control facility as defined herein, the Pollution Control Board, acting through its Chairman or his specifically authorized delegate, shall enter a finding and issue a certificate to that effect. Such certificate shall require tax treatment as a pollution control facility in conformity with this State's taxing provisions providing for such treatment, but only for the portion certified if only a portion be certified. The effective date of a certificate shall be the date of the making of the application for the certificate or the date of the construction of the facility, whichever is later." Ill. Rev. Stat. 1979, ch. 120, par. 502a-5.
The foregoing provision section 21a-5 requires that a facility certified by the Environmental Protection Agency pursuant to the provisions of the Act shall be treated as a pollution control facility for taxation purposes.
In the instant case the Duck Creek cooling pond and the E.D. Edwards fly ash collection station, including the electronic scale, were certified by the Environmental Protection Agency as having as their primary purpose pollution control. CILCO argues that such certification is conclusive evidence that the facilities' purpose is pollution control and hence it is entitled to the tax exemptions contained in section 2a of the Use Tax Act. Ill. Rev. Stat. 1979, ch. 120, par. 439.2a.
• 1 The Department argues that section 21a-5 of the Revenue Act of 1939 is limited in its application to providing exemption from only ad valorem real and personal property taxes. Stated otherwise, it is the Department's contention that the section has no application ...