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Material Serv. Corp. v. Dep't of Revenue





Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Earl Arkiss, Judge, presiding.


Rehearing denied December 2, 1983.

This appeal involves the review of an administrative decision by the defendant, the Department of Revenue (Department), that the plaintiff, the Material Service Corporation, is liable under the Retailers' Occupation Tax Act (Ill. Rev. Stat. 1977, ch. 120, par. 440 et seq.) on minimum load charges uniformly collected on small sales of ready-mix concrete. The defendant issued a final deficiency tax assessment for taxes, penalties and interest in the amount of $25,301.58, covering the period from July 1973 through December 1976. The circuit court of Cook County on administrative review vacated the final assessment. The appellate court reversed the judgment of the circuit court (105 Ill. App.3d 74), and we granted the plaintiff's petition for leave to appeal (87 Ill.2d R. 315).

The plaintiff is in the business of manufacturing and selling ready-mix concrete. The concrete is mixed and delivered by trucks with rotating drums having a maximum capacity of 10 cubic yards. The concrete is sold at a uniform price per cubic yard. In addition, a fixed "minimum load charge" of $27 is charged on all sales of less than five cubic yards per truck.

On April 27, 1966, the Department issued a letter ruling in response to the plaintiff's inquiry concerning the liability for tax on the minimum load charge under the Retailers' Occupation Tax Act. This ruling in part stated:

"In reply to your request for a ruling concerning minimum load charges * * * which are separately contracted for and separately charged, please be advised that they are excludable in the computation of retailers' occupation tax."

On December 8, 1977, the Department issued a notice of tax liability assessing a deficiency with respect to approximately 12,500 minimum load charges collected by the plaintiff between July 1973 and December 1976. After an administrative hearing requested by the plaintiff, the hearing officer held in favor of the Department, concluding that it was not bound by its letter ruling, and on March 29, 1979, the Department issued a final assessment.

The plaintiff filed a complaint in the circuit court for administrative review, and on January 11, 1980, the circuit court entered a final order sustaining the imposition of the tax on the minimum load charges. The record contains the affidavit of Francis R. Burke, the plaintiff's general sales manager, which stated that the minimum load charge is related to the cost of providing drivers and maintaining vehicles in supplying minimum loads. Considering the affidavit, the court held that the charge is part of the transportation cost of delivering concrete and thus includable in the total cost of manufacture. The court noted that article III, section 3, of the Department's Rules and Regulations provides that, "[i]n computing retailers' occupation tax liability, no deduction shall be made by a taxpayer from gross receipts or selling prices on account of * * * freight or transportation costs." The plaintiff's motion to vacate was denied, but after considering a motion by the plaintiff to reconsider, the court entered an amended final order on October 17, 1980. In it the court reaffirmed its holding that the minimum load charges are not excludable from gross receipts in determining the retailers' occupation tax, but it judged that the Department was bound by its letter ruling which, the court said, was relied upon by the plaintiff. Accordingly, the court vacated its January 11, 1980, order sustaining the tax and final assessment against the plaintiff.

The Department appealed from that part of the amended final order which set aside the January 11, 1980, order allowing the final assessment against the plaintiff. The plaintiff filed a cross-appeal from the part of the order affirming that the minimum load charges are not excludable from gross receipts and are taxable.

Considering later that a cross-appeal was not necessary to preserve its contention, the plaintiff, in one of the briefs it filed in the appellate court appeal, stated that it was withdrawing its cross-appeal. Both the appellant's and the appellee's briefs, however, did discuss the issue the plaintiff raised on the cross-appeal. Although noting that the plaintiff had not formally moved for withdrawal of its cross-appeal and that no order dismissing it had been entered, the appellate court refused to consider whether the circuit court erred in finding that the minimum load charges were subject to taxation. The appellate court held that the minimum load charges had not been separately contracted for and thus the terms of the Department's letter ruling that minimum load charges would be excludable were not met. Under such circumstances, the deficiency assessment imposed on the plaintiff was proper, the appellate court held.

A party cannot complain of error which does not prejudicially affect it, and one who has obtained by judgment all that has been asked for in the trial court cannot appeal from the judgment. (Hillmer v. Chicago Bank of Commerce (1940), 375 Ill. 266; People ex rel. Jones v. Adams (1976), 40 Ill. App.3d 189; In re Estate of Trapani (1959), 21 Ill. App.2d 19.) "It is fundamental that the forum of courts> of appeal should not be afforded to successful parties who may not agree with the reasons, conclusion or findings below." (Illinois Bell Telephone Co. v. Illinois Commerce Com. (1953), 414 Ill. 275, 282-83; see N-Ren Corp. v. Illinois Commerce Com. (1981), 98 Ill. App.3d 1076.) It cannot be said that the plaintiff waived the question of whether minimum load charges are taxable by withdrawing its cross-appeal. Here the plaintiff sought reversal of the administrative decision imposing the deficiency assessment. Although the circuit court said that the minimum load charges were ordinarily taxable, they were not to be taxed in this factual situation, and the court granted all of the requested relief. Under such circumstances, and contrary to what the Department contends, it was unnecessary for the plaintiff to file a cross-appeal. (See Kerner v. State Employees' Retirement System (1977), 53 Ill. App.3d 747.) It is the judgment and not what else may have been said by the lower court that is on appeal to a court of review. (Rabus v. Calcari (1959), 16 Ill.2d 99; Gould v. Gould (1951), 408 Ill. 526.) The reviewing court is not bound to accept the reasons given by the trial court for its judgment (Weber v. Woods (1975), 31 Ill. App.3d 122), and the judgment may be sustained upon any ground warranted, regardless of whether it was relied on by the trial court and regardless of whether the reason given by the trial court was correct. (Monarski v. Greb (1950), 407 Ill. 281; Bullman v. Cooper (1936), 362 Ill. 469; 5A C. Nichols, Illinois Civil Practice sec. 5663 (1975 rev. vol.).) Findings of the trial court adverse to the appellee do not require the appellee's cross-appeal if the judgment of the trial court was not at least in part against the appellee.

The defendant notes, however, that it has been held that "where a general decision for the appellee contains a specific finding unfavorable to him and he fails to file a cross-appeal, the adverse finding is not properly before the reviewing court." (Cleys v. Village of Palatine (1980), 89 Ill. App.3d 630, 635; Village of Arlington Heights v. National Bank (1977), 53 Ill. App.3d 917.) The appellate court here cited Cleys in refusing to consider the issue raised in the cross-appeal. All of these opinions rely on City of Wilmington v. Industrial Com. (1972), 52 Ill.2d 587, for support. In Wilmington, however, the circuit court had denied a claim for interest but otherwise upheld the compensation award for the appellee. This court held that the appellee's failure to cross-appeal from the part of the judgment denying the claim for interest precluded consideration of the issue. Different from Wilmington, no part of the judgment here was adverse to the plaintiff. The appellate court should have considered the plaintiff's contention that the circuit court erred in finding that the minimum load charges were subject to the retailers' occupation tax.

Section 2 of the Retailers' Occupation Tax Act (Ill. Rev. Stat. 1977, ch. 120, par. 441), with several exceptions not relevant here, imposes a tax "upon persons engaged in the business of selling tangible personal property at retail * * *." Section 1 of the Act (Ill. Rev. Stat. 1977, ch. 120, par. 440) provides the following definitions:

"`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, * ...

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