The Honorable Justice Nickels delivered the opinion of the court: Justice Harrison took no part in the consideration or decision of this case.
The opinion of the court was delivered by: Nickels
The Honorable Justice NICKELS delivered the opinion of the court:
This appeal represents our second encounter with the program of taxes imposed by defendant, the Metropolitan Pier and Exposition Authority (Authority), to finance the renovation and expansion of McCormick Place and related infrastructure improvements. In Geja's Cafe v. Metropolitan Pier & Exposition Authority, 153 Ill. 2d 239, 180 Ill. Dec. 135, 606 N.E.2d 1212 (1992), this court upheld a retailers' occupation tax imposed by the Authority on certain food and beverage sales. In the instant case we consider the constitutionality of an airport departure tax imposed by the Authority on providers of ground transportation services from Chicago's O'Hare and Midway Airports. Plaintiffs include several suburban and out-of-state businesses which provide bus, van or limousine transportation from the airports, but which do not serve destinations within the City of Chicago. Plaintiffs brought this action in the circuit court of Cook County on behalf of themselves and all others similarly situated, challenging the constitutionality of the tax under the commerce clause and the equal protection clause of the United States Constitution (U.S. Const., art. I, § 8; amend. XIV) and the uniformity clause of the Illinois Constitution of 1970 (Ill. Const. 1970, art. IX, § 2). The trial court entered judgment on the pleadings or summary judgment in the Authority's favor on each of the counts in plaintiffs' class action complaint. We granted plaintiffs leave to appeal directly to this court under Supreme Court Rule 302(b) (134 Ill. 2d R. 302(b)). For the reasons set forth below, we affirm the judgment of the trial Court. *fn1
In 1992, the General Assembly enacted Public Act 87--733, eff. July 1, 1992, amending the Metropolitan Pier and Exposition Authority Act (Act) (70 ILCS 210/1 et seq. (West 1994)) to provide for a project to renovate and expand McCormick Place (the expansion project). The expansion project includes plans for the renovation of McCormick Place's existing facilities and the construction of a new exhibition hall with a concourse to the existing facilities. It is anticipated that the expanded and improved McCormick Place facilities will lead to a significant increase in tourism to Chicago, thereby boosting certain sectors of the local and regional economy.
To finance the expansion project, the Authority was granted power to issue bonds in an amount not to exceed $937 million. 70 ILCS 210/13.2 (West 1994). In turn, under section 13 of the Act (70 ILCS 210/13 (West 1994)) the Authority is directed to levy a series of local taxes in order to repay the bonds. Section 13(f) provides that "by ordinance the Authority shall *** impose an occupation tax on all persons, other than a governmental agency, engaged in the business of providing ground transportation for hire to passengers in the metropolitan area ***." 70 ILCS 210/13(f) (West 1994). The tax is collected at rates specified in the Act from commercial vehicles departing from Chicago's O'Hare Airport and Midway Airport with passengers for hire. For certain types of transportation service, the tax is imposed at the rate of $1 per passenger. Otherwise, the tax is a flat amount per vehicle which varies depending on the type and capacity of the vehicle. The amounts range from $2 per departure for taxi or livery vehicles to $27 per departure for buses or vans with capacities exceeding 24 passengers.
The Authority enacted an ordinance imposing the airport departure tax in accordance with section 13(f), and plaintiffs brought this lawsuit as a class action seeking, inter alia, a declaratory judgment that the airport departure tax is invalid. The trial court conditionally certified four classes of plaintiffs who provide airport transportation service exclusively to destinations outside the City of Chicago. Classes A and C consist of operators of taxicabs or limousines based in Illinois (Class A) or outside the State (Class C) that, from time to time, depart from the airports with passengers for hire, but are not licensed by the City of Chicago to operate within its city limits. Class E consists of all operators of buses or vans regulated by the Interstate Commerce Commission that provide scheduled service from the airports with no destinations within the City of Chicago. Class F consists of bus and van operators providing charter or other unscheduled passenger service from the airports to destinations outside the City of Chicago. Vehicle operators with vehicle licenses issued by the City of Chicago who pay the tax are not included in the plaintiff classes.
Plaintiffs' class action complaint, as amended, consists of 13 counts challenging the airport departure tax under a variety of theories. Several counts raise the theory that, as applied to the members of the plaintiff classes, the airport departure tax violates the constitutional guarantees of equal protection and uniformity in nonproperty taxation because only those vehicle operators serving destinations in Chicago stand to benefit economically from increased tourism related to the expansion and renovation of McCormick Place. In other counts, plaintiffs allege that the tax places an impermissible burden on interstate commerce in violation of the commerce clause of the United States Constitution (U.S. Const., art. I, § 8). The trial court entered judgment on the pleadings in the Authority's favor on those counts brought under the commerce clause and each of the remaining counts except those alleging uniformity and equal protection violations. Thereafter, the parties filed cross-motions for summary judgment on the equal protection and uniformity clause counts. The trial court granted the Authority's motion and denied plaintiffs' motion. Plaintiffs filed a notice of appeal from the trial court's orders, and thereafter filed a motion pursuant to Supreme Rule 302(b) (134 Ill. 2d R. 302(b)) to transfer the appeal to this court. We granted the motion and also granted the United Bus Owners of America leave to file an amicus curiae brief in support of plaintiffs.
I. Uniformity and Equal Protection
Plaintiffs first contend that the trial court erred in denying their summary judgment motion and granting the Authority's motion on those counts alleging that the airport departure tax violates the equal protection clause of the United States Constitution (U.S. Const., amend. XIV) and the uniformity clause of the Illinois Constitution (Ill. Const. 1970, art. IX, § 2). The uniformity clause provides:
"In any law classifying the subjects or objects of nonproperty taxes or fees, the classes shall be reasonable and the subjects and objects within each class shall be taxed uniformly. Exemptions, deductions, credits, refunds and other allowances shall be reasonable." Ill. Const. 1970, art. IX, § 2.
The uniformity clause imposes more stringent limitations than the equal protection clause on the legislature's authority to classify the subjects and objects of taxation. Geja's Cafe v. Metropolitan Pier & Exposition Authority, 153 Ill. 2d 239, 247, 180 Ill. Dec. 135, 606 N.E.2d 1212 (1992); Searle Pharmaceuticals, Inc. v. Department of Revenue, 117 Ill. 2d 454, 467-68512 N.E.2d 1240, 111 Ill. Dec. 603 (1987). "If a tax is constitutional under the uniformity clause, it inherently fulfills the requirements of the equal protection clause." Geja's Cafe, 153 Ill. 2d at 247. Accordingly, we need only consider the validity of the airport departure tax under the uniformity clause. See Geja's Cafe 153 Ill. 2d at 247.
To survive scrutiny under the uniformity clause, a nonproperty tax classification must be based on a real and substantial difference between the people taxed and those not taxed, and the classification must bear some reasonable relationship to the object of the legislation or to public policy. Searle Pharmaceuticals, Inc. v. Department of Revenue, 117 Ill. 2d 454, 468,512 N.E.2d 1240; 111 Ill. Dec. 603 (1987); see also Northern Illinois Home Builders Ass'n v. County of Du Page, 165 Ill. 2d 25, 44-45, 208 Ill. Dec. 328, 649 N.E.2d 384 (1995); Geja's Cafe v. Metropolitan Pier & Exposition Authority, 153 Ill. 2d 239, 247, 180 Ill. Dec. 135, 606 N.E.2d 1212 (1992); Federated Distributors, Inc. v. Johnson, 125 Ill. 2d 1, 15, 125 Ill. Dec. 343, 530 N.E.2d 501 (1988). The uniformity requirement, as traditionally understood, may be violated by classifications which are either "underinclusive" or "overinclusive." See G. Braden & R. Cohn, The Illinois Constitution: An Annotated and Comparative Analysis 416 (1969) ("where the legislature defines and levies *** [a nonproperty tax] upon a class, *** the class as defined must include only those properly within it and not exclude those reasonably a part of it"). Although the uniformity clause imposes a more stringent standard than the equal protection clause, the scope of a court's inquiry under the uniformity clause remains relatively narrow. Geja's Cafe, 153 Ill. 2d at 248. Statutes bear a presumption of constitutionality, and broad latitude is afforded to legislative classifications for taxing purposes. Geja's Cafe, 153 Ill. 2d at 248. One challenging a nonproperty tax classification has the burden of showing that it is arbitrary or unreasonable, and if a state of facts can reasonably be conceived that would sustain the classification, it must be upheld. Geja's Cafe, 153 Ill. 2d at 248.
In the case at bar, the common characteristic linking the vehicle operators in the plaintiff classes--and forming the basis of plaintiffs' uniformity clause challenge--is that although they provide ground transportation service departing from the airports, they do not transport airport passengers for hire into the City of Chicago. Some of the class members are prohibited by Chicago's ground transportation licensing ordinance from transporting passengers from the airports to destinations in Chicago. Under the ordinance, a Chicago vehicle license is required to provide transportation service wholly within the city. See Chicago Municipal Code §§ 9--112--020, 9--112--030 (1990). *fn2 Other class members provide scheduled airport service along routes which do not include destinations in the City of Chicago. Plaintiffs maintain that in terms of the economic impact of the McCormick Place expansion project, there is a real and substantial difference between the vehicle operators in the plaintiff classes and their city-licensed counterparts, because only the operators of city-licensed vehicles enjoy the opportunity to transport passengers from the airports to McCormick Place or nearby downtown hotels. Plaintiffs contend that any positive economic impact from the expansion project for class members is too indirect to support taxing them in the same manner as those operators providing airport transportation to destinations in Chicago, who enjoy a direct benefit by virtue of an increased demand for transportation to McCormick Place and nearby hotels.
Plaintiffs rely on Geja's Cafe, where, as previously noted, this court upheld the food and beverage tax imposed by the Authority in connection with the McCormick Place expansion project. The tax applied to certain types of food and beverage sales within a geographic subdistrict in Chicago. One of the arguments raised by its opponents was that pursuant to the uniformity requirement, the tax should have been imposed on food and beverage sales throughout Cook County. This court rejected the argument, finding that "the General Assembly could reasonably conclude that the direct beneficiaries [of the expansion project's economic impact] would be those within the taxing subdistrict, and plaintiffs have not produced anything to suggest that narrowing the taxed area in this fashion was unreasonable." Geja's Cafe, 153 Ill. 2d at 250-51. ...