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12/01/87 Harrisburg-Raleigh Airport v. the Department of Revenue

December 1, 1987





516 N.E.2d 967, 163 Ill. App. 3d 253, 114 Ill. Dec. 812 1987.IL.1766

Appeal from the Circuit Court of Saline County; the Hon. C. David Nelson, Judge, presiding.


JUSTICE WELCH delivered the opinion of the court. LEWIS and CALVO, JJ., concur.


In this case of first impression, the Illinois Department of Revenue (hereinafter referred to as Department) appeals the decision of the circuit court of Saline County reversing the Department's denial of tax exempt status to certain property owned by the Harrisburg-Raleigh Airport Authority (hereinafter referred to as Airport).

On November 30, 1983, the Saline County Board of Review submitted its certification of exemption request to the Department, finding that certain property of the Airport was exempt from general taxes for the year 1983. The Department issued an exemption certification approving the requested exemption except for certain mineral interests not at issue in this appeal, and certain hangars which, the Department concluded, remained taxable.

The Airport applied for administrative review of the Department's decision with respect to the hangars and, after hearing before an administrative law Judge, the Department's decision was affirmed. On February 18, 1986, the Airport filed its complaint for administrative review before the circuit court of Saline County.

The circuit court reversed the decision of the Department, finding that the hangars in question, although rented to private individuals for storage of private planes, remain airport property used for airport authority purposes and are therefore exempt from taxation under section 19.20 of the Revenue Act of 1939. (Ill. Rev. Stat. 1985, ch. 120, par. 500.20.) The Department appeals.

The hangars in question are available for rent to the public for storage of aircraft on a first come, first served basis. There are 20 hangars available and the Airport averages a 75% occupancy rate, which approaches full occupancy during the winter months. The hangars are rented on a monthly basis at the rate of $35 to $85 per month. Some tenants pay rent for a full year in advance, rather than on a monthly basis. The Airport maintains the hangars and provides electricity thereto.

Section 19.20 of the Revenue Act provides tax exempt status for "[all] property of every kind belonging to any Airport Authority and used for Airport Authority purposes." (Ill. Rev. Stat. 1985, ch. 120, par. 500.20.) There is no question that the Airport constitutes an Airport Authority within the meaning of this section and that the hangars are owned by the Airport Authority. The only question is whether the hangars are used for Airport Authority purposes. The Department held that they were not, and in so finding, misconstrued the statute.

Courts of review are not bound to give the same measure of deference to an administrative agency's construction of a statute as is given to its findings of fact. (Nestle Co. v. Johnson (1979), 68 Ill. App. 3d 17, 20, 385 N.E.2d 793, 795.) A decision based upon an erroneous, arbitrary or unreasonable construction of a statute cannot be allowed to stand. Winnetkans Interested in Protecting the Environment v. Pollution Control Board (1977), 55 Ill. App. 3d 475, 480, 370 N.E.2d 1176, 1179.

While it is true that statutes exempting property from taxation must be strictly construed in favor of taxation (Follett's Illinois Book & Supply Store, Inc. v. Isaacs (1963), 27 Ill. 2d 600, 606, 190 N.E.2d 324, 327), courts may not read into a statute words that are not within the plain intention of the legislature (People ex rel. Daley v. Nine Thousand Four Hundred and Three Dollars, $9,403 in U.S.C. (1985), 131 Ill. App. 3d 188, 191, 476 N.E.2d 80, 82). The cardinal rule of statutory construction, to which all other canons and rules are subordinate, is to ascertain and give effect to the legislature's intent. Stewart v. Industrial Comm'n (1987), 115 Ill. 2d 337, 341, 504 N.E.2d 84, 86.

It is clear that the legislature intended that the tax exemption provided in section 19.20 of the Revenue Act extend to the hangars in question here. The hangars are ...

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