Appeal from the Circuit Court of Cook County; the Hon. Joseph
M. Wosik, Judge, presiding.
JUSTICE MEJDA DELIVERED THE OPINION OF THE COURT:
Defendants, the Illinois Department of Revenue, the State Treasurer, and the Director of the Department of Revenue, appeal from the judgment of the circuit court which held that plaintiff, Chicago Tribune Company, met the statutory requirements for an exemption from the Use Tax Act (Ill. Rev. Stat. 1981, ch. 120, par. 439 et seq.), and that the monies which plaintiff had paid into a protest fund must be invested and the interest earned thereon paid to the prevailing party. Defendants seek reversal of both rulings. For the reasons which follow we reverse the judgment of the circuit court.
At issue is the proper construction of the Use Tax Act which provides, in part, that a "tax is imposed upon the privilege of using in this State tangible personal property * * *." (Ill. Rev. Stat. 1981, ch. 120, par. 439.3.) Plaintiff has recently purchased several new printing presses and other machines for use in the printing of the Chicago Tribune. Neither party has questioned whether these machines are within the scope of the proviso imposing the use tax. Plaintiff asserts, and the circuit court held, that the machinery is not subject to use tax because it qualifies for the following statutory exemption:
"The tax imposed by this Act does not apply to the use of machinery and equipment primarily in the process of the manufacturing or assembling of tangible personal property for wholesale or retail sale or lease * * *." (Ill. Rev. Stat. 1981, ch. 120, par. 439.3.)
Defendants conceded at oral argument that plaintiff's machinery is used in "manufacturing or assembly," but they contend that the newspapers which result from that manufacturing process are not "tangible personal property" for sale or lease within the meaning of the exemption.
The circuit court's memorandum opinion contained an extensive factual discussion; the nature of our decision, however, obviates the need for a lengthy factual discourse in this opinion. It is sufficient to note that two witnesses testified to the various procedures which comprise the printing of the Chicago Tribune. The trial court found, as a matter of fact, that the publication of a newspaper results in "tangible personal property." Although the Use Tax Act does not define "tangible personal property," the Retailers' Occupation Tax Act (Ill. Rev. Stat. 1981, ch. 120, par. 400 et seq.) provides explicitly that "[t]he purchase, employment and transfer of such tangible personal property as newsprint and ink for the primary purpose of conveying news (with or without other information) is not a purchase, use or sale of tangible personal property." (Ill. Rev. Stat. 1981, ch. 120, par. 440.) The defendants urge that, as a matter of law, a newspaper is not "tangible personal property" for sale by virtue of the definition in the Retailers' Occupation Tax Act.
• 1 Before discussing the merits of this argument, we must consider the plaintiff's contention that the defendant Department of Revenue admitted in the trial court that individual Chicago Tribunes are tangible personal property. This assertion is based on a letter from the chief of the revenue litigation division of the Attorney General's office. This letter stated in relevant part that "this office is prepared at this time to stipulate only to paragraphs 1 through 4 and 43 through 50 of your proposed draft [stipulation]." Paragraph 50 of the proposed stipulation provided that "[e]ach item of machinery and equipment purchased by Tribune * * * is used primarily in the production of Chicago Tribunes, which are tangible personal property." In our view, the "prepared to stipulate" language of the letter in question does not constitute a sufficiently definite agreement to stipulate to the proposed facts. (See City of Rolling Meadows v. Kohlberg (1980), 83 Ill. App.3d 10, 16, 403 N.E.2d 1040; see also 34 Ill. L. & Prac. Stipulations sec. 2 (1958).) Accordingly, we conclude that no valid stipulation was entered into at the trial level. We will therefore consider the defendants' argument.
• 2 The defendants assert that the phrase "tangible personal property" is a term of art which has the same meaning wherever it is used. The plaintiff responds that the Use Tax Act and the Retailers' Occupation Tax Act are two completely different statutes with entirely different purposes, and therefore a definition in one may not validly be applied to the construction of the other. The interrelationship between the Use Tax Act and the Retailers' Occupation Tax Act cannot be so easily dismissed, however. Our supreme court has held that the basic purposes of the Use Tax Act "are to complement the Retailers' Occupation Tax Act by preventing the evasion of tax on purchases made outside the State and to equalize the competitive disadvantage of Illinois retailers who face retailers' occupation tax liability. (Illinois Road Equipment Co. v. Department of Revenue (1965), 32 Ill.2d 576, 580.)" (United Air Lines, Inc. v. Johnson (1981), 84 Ill.2d 446, 450, 419 N.E.2d 899; see also American Airlines, Inc. v. Department of Revenue (1974), 58 Ill.2d 251, 252, 319 N.E.2d 28; Howard Worthington, Inc. v. Department of Revenue (1981), 96 Ill. App.3d 1132, 421 N.E.2d 1030.) Plaintiff's argument focuses exclusively on the latter purpose, while disclaiming the legitimacy of the former. The supreme court has indicated, however, that the Use Tax Act and the Retailers' Occupation Tax Act together comprise a comprehensive legislative system for the taxation of the sale, purchase, and use of tangible personal property.
"The Use Tax Act complements the Retailers' Occupation Tax Act in such a fashion so that an Illinois retailer who collects the use tax as an agent of the State is correspondingly relieved of his retailers' occupation tax liability on the transaction. [Citation.] On the other hand, purchasers who seek to avoid having the retailers' occupation tax liability passed on to them by buying goods outside the State face use tax liability on goods they bring into Illinois." (United Airlines, Inc. v. Johnson (1981), 84 Ill.2d 446, 450-51, 419 N.E.2d 899.)
While this interrelationship is not of itself determinative of the question before us, it does provide a basis for rejecting the plaintiff's argument that the two statutes are independent of one another.
"`* * * Statutes which relate to the same thing or to the same subject or object are in pari materia although they were enacted at different times. It is a primary rule of statutory construction that not only should the intention of the legislature be deduced from a view of the whole statute and from its every material part, but statutes in pari materia should be construed together.' People ex rel. Harrell v. Baltimore and Ohio Railroad Co. 411 Ill. 55, 58 and 59." (People ex rel. Nordstrom v. Chicago & North Western Ry. Co. (1957), 11 Ill.2d 99, 106, 142 N.E.2d 26.)
Because the Use Tax Act was enacted as a complement to the Retailers' Occupation Tax Act and because both statutes implement the legislature's plan for the taxation of transfers of tangible personal property, we conclude that the two statutes are in pari materia. Construing the two statutes together, we conclude that the legislative exclusion of newspapers from the definition of tangible personal property in the Retailers' Occupation Tax Act may be applied to define that same term in the Use Tax Act. (See People ex rel. Scott v. Schwulst Building Center, Inc. (1982), 89 Ill.2d 365, 372, 432 N.E.2d 855.) Under the definition adopted by the legislature, plaintiff as a matter of law does not produce items of tangible personal property. Accordingly, plaintiff does not qualify for the exemption from the use tax.
• 3 We note that plaintiff's presentation in the trial court was designed to prove that individual copies of the Chicago Tribune were tangible items of personal property within the dictionary definition of those terms. But the legislature is not bound to follow commonly recognized meanings of terms or existing definitions created by persons in other fields. (People v. McCarty (1981), 86 Ill.2d 247, 254, 427 N.E.2d 147.) When the legislature has defined a term, it is our duty to apply that definition and not some other which might appear to be more plausible.
Plaintiff contends that our construction of the statute is inappropriate in light of the legislative purpose of the exemption. Plaintiff relies on Time Inc. v. Hulman (1964), 31 Ill.2d 344, 201 N.E.2d 374, in which our supreme court articulated the rationale of the newsprint exemption from the retailers' occupation tax as "to prevent discrimination against newspapers in favor of radio and television, which furnish news and other information, but do not transfer tangible personal property." (31 Ill.2d 344, 351, 201 N.E.2d 374.) Plaintiff asserts that this same rationale applies to the use tax and that the exemption from that tax should be construed to apply to the newspaper business. Plaintiff's argument overlooks an important distinction between the use tax and the retailers' occupation tax, however. The latter tax is imposed on the transfer of tangible personal property; because the electronic media do not present information in a tangible form and the print media do so, the tax imposed on the transfer of tangible personal property would discriminate against the print media in the absence of an exemption. Interestingly, the exemption from the retailers' occupation tax does not provide that newspapers are exempt from the tax, but only provides that newspapers receive the same treatment as the electronic media: "The purchase, employment and transfer of such tangible personal property as newsprint and ink for the primary purpose of conveying news * * * is not a purchase, use or sale of tangible personal property." (Ill. Rev. Stat. 1981, ch. 120, par. 440.) In contrast to the retailers' occupation tax, the use tax is imposed on the use of tangible personal property. This distinction achieves significance in the context of the news media because, while the electronic media do not transfer information in a tangible form and the ...