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03/27/96 KEVIN BALL AND MAY KOSTELNY v. VILLAGE

March 27, 1996

KEVIN BALL AND MAY KOSTELNY, PLAINTIFFS-APPELLEES,
v.
VILLAGE OF STREAMWOOD, AN ILLINOIS MUNICIPAL CORPORATION, AND DAVID RICHARDSON, FINANCE DIRECTOR OF THE VILLAGE OF STREAMWOOD, DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Cook County. Honorable Edwin M. Berman, Judge Presiding.

As Corrected May 10, 1996.

The Honorable Justice Greiman delivered the opinion of the court: Rizzi, P.j., and Tully, J., concur.

The opinion of the court was delivered by: Greiman

The Honorable Justice GREIMAN delivered the opinion of the court:

Kevin Ball and May Kostelny (plaintiffs) are Village of Streamwood (Streamwood or the Village) residents and homeowners contesting the constitutionality of an exemption to Streamwood's real estate transfer tax (the tax). The tax, as amended, imposes on sellers of real property a $3 fee for every $1,000 of their property's purchase price (a home sold for $300,000 would incur a $900 tax). The challenged exemption relieves sellers who purchase new residences within the Village of Streamwood from payment of the tax.

Plaintiffs filed a complaint challenging the constitutionality of the Village tax ordinance. The Village responded with a motion to dismiss which the trial court granted, without prejudice, only as to Count I of plaintiff's complaint, finding that the ordinance does not violate the right to travel. In an order dated August 21, 1995, the trial court, pursuant to Supreme Court Rule 308 (134 Ill. 2d R. 308), certified four questions for this court to address:

Question #1. Whether the constitutional right to travel is violated or impaired by the exemption to the Village's real estate transfer tax?

Question #2. Whether the exemption to the real estate transfer tax, which exempts from payment of the tax sellers who purchase residences within the Village, unconstitutionally violates the taxpayers' rights to uniformity, equal protection and due process?

Question #3. Whether plaintiffs have standing to challenge the constitutionality of the tax based upon the existence of an exemption where plaintiffs do not qualify for the exemption (by purchasing outside the Village) and where the Village has adopted a severability clause in its transfer tax ordinance?

Question #4. Whether the voluntary payment doctrine prevents plaintiffs from challenging the tax and exemption where plaintiffs paid the tax without filing a contemporaneous protest?

In 1988, the Village adopted ordinance number 1988-52, amended in 1993 raising the tax from $1 to $3, imposing a title transfer tax on Village residents. The ordinance provides in pertinent part:

"3-12-2: Tax Imposed: A tax is imposed on the privilege of transferring title to real estate located within the corporate limits of the Village as evidenced by the recordation of a deed by any person and a tax is imposed on the privilege of transferring the beneficial interest in real estate located within the corporate limits of the Village at the rate of three dollars ($3.00) per one thousand dollars ($1,000.00) of value for each transfer. The tax herein levied shall be in addition to any and all other taxes."

Subsection L of the tax ordinance exempts from payment of the tax: "Transactions wherein one of the grantors has continuously resided upon the property for the past one year and has evidence of a contract for sale as a purchaser for a residence within the Village, such contract having closed within nine months of the exempt transaction or to close by contract within three months after the exempt transaction."

Plaintiffs, individually, transferred title to real estate located within the Village to third parties and subsequently purchased residences outside the Village. Plaintiffs were taxed and, subject to various fines for noncompliance, paid the Village's transfer tax. ...


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