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07/16/87 Central Illinois Public v. the Department of Revenue

July 16, 1987




Before the sodium sulfite can be reused in the scrubber liquor, soda ash must be added to provide "makeup" sodium in replacement for sodium sulfite lost in the extraction process. Thus, the soda ash "regenerates" the scrubbing liquor. Lime and soda ash are essential additives to the scrubbing liquor, which removes the pollutant and enables CIPS to comply with the applicable State and Federal environmental laws.


511 N.E.2d 222, 158 Ill. App. 3d 763, 110 Ill. Dec. 387 1987.IL.995

Appeal from the Circuit Court of Sangamon County; the Hon. Richard E. Mann, Judge, presiding.


JUSTICE McCULLOUGH delivered the opinion of the court. LUND and KNECHT, JJ., concur.


The Department of Revenue of the State of Illinois (Department) appeals from an order of the circuit court of Sangamon County reversing an administrative decision which denied Central Illinois Public Service Company an exemption from the Illinois Use Tax Act (Act) (Ill. Rev. Stat. 1985, ch. 120, par. 439.2a). CIPS sought an exemption for the purchase of certain railway cars, used in connection with pollution control facilities.

On appeal, the Department maintains that the railway cars, which are utilized to transport minerals for use in an air pollution "scrubber system," do not qualify for tax-exempt status under the Act. We agree with the Department and consequently reverse the circuit court order.

CIPS is a public utility which produces electrical power by means of a coal-fired power generating plant. The plant is located near Newton, Illinois. Pursuant to State and Federal environmental regulations, CIPS was required to install a "scrubber system" to eliminate concentrations of sulfur dioxide , which result from burning high sulfur coal. The scrubber system has been certified by the Illinois Environmental Protection Agency as a "pollution control facility" for property tax purposes. Ill. Rev. Stat. 1985, ch. 120, par. 439.2a.

The "Newton scrubber system" reduces SO emissions through a scientific method by which SO is absorbed from stack gas emissions and then reduced to a solid form which is disposed of in a landfill. While the actual process is scientifically complex, a generalized version of the pollution reduction procedure will suffice for our purposes.

Initially, flue gas from the power station is sprayed with a scrubbing liquor consisting primarily of sodium sulfite. This liquor reacts with the SO in the gas to form sodium bisulfite, which is continuously bled off in liquid form and pumped into reaction tanks. In the reaction tanks, lime is added to the sodium bisulfite, creating sodium sulfite and calcium sulfite. The sodium sulfite in liquid form can then be reused in the scrubbing liquor. The calcium sulfite is a solid which is ultimately forced out of the system through an extractor filter. The calcium sulfite later becomes a solid waste product which is disposed of in a landfill located near the scrubber.

CIPS purchased covered hopper railway cars to transport the lime and soda ash used in the scrubber system. The system requires approximately 250 tons of lime and 25 tons of soda ash daily. The cars are specifically designed to carry and unload caustic materials such as lime and soda ash. They are equipped with special top coverings and underneath unloading devices, which keep the materials inside from escaping, keep them dry, and keep them from coming into contact with the people working around them.

Prior to purchasing the railway cars, CIPS leased cars from a railroad company. The leasing arrangement, however, caused serious delivery problems. Cars were often unavailable and consequently, sufficient supplies could not be assured. Additionally, the leased cars were sometimes incompatible with the Newton plant's unloading system. At various times before CIPS purchased the railway cars, it was forced to shut down the scrubber system because sufficient quantities of lime and soda ash had not been promptly delivered. All problems were alleviated by the purchase of the railway cars.

Although the railway cars are used primarily to transport minerals to the scrubber system, they are also used for temporary on-site storage of the minerals prior to use at the Newton plant. While the railway cars could be utilized to transport other materials, they are used exclusively in conjunction with the operation of the scrubber system. CIPS maintains that they would not have purchased the cars but for the need to efficiently operate the scrubber system. The railway cars were purchased subsequent to EPA certification of the ...

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