APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE DOROTHY KINNAIRD, JUDGE PRESIDING.
The opinion of the court was delivered by: Justice Wolfson
People who transfer title to real estate in the Village of Hoffman Estates are required to pay a transfer tax. But, since September 21, 1987, a grantor who lives on the property for a year is exempted from paying the tax if he or she buys another residence in the Village within a certain period of time.
The plaintiffs in this case--Gary and Carol Stahl, Harvey and Susan Silverberg, and James Faust--have launched a wide variety of constitutional attacks on the transfer tax and its exemption. They claim violations of the United States Constitution: the Commerce Clause, the Privileges and Immunities Clause, the Due Process Clause, the Equal Protection Clause, and the right to travel. They also contend the tax violates the Illinois Constitution's uniformity of taxation and due process clauses.
The trial court dismissed the plaintiffs' lawsuit against the Village, finding no violations of the Federal or State Constitutions. We agree with the trial court. We affirm.
On September 21, 1987, the Village of Hoffman Estates adopted ordinance 1884-1987:
"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 One Dollar per One Thousand Dollars of value for each transfer."
Under the ordinance, the grantor of a deed conveying Village property would incur transfer tax liability. In 1990, the Village raised this tax to $3 for every $1,000 valuation.
The ordinance also provided an exemption for:
"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 three months of the exempt transaction or to close by contract within three months after the exempt transaction."
The Village amended this exemption in 1993 to include contracts closing six months before and after the exempt transaction.
On June 5, 1992, Faust sold his home, moved to Hanover Park, Illinois, and incurred a transfer tax liability of $606. On December 20, 1993, the Stahls sold their home, moved to Crystal Lake, Illinois, and incurred a transfer tax liability of $423. On September 25, 1996, the Silverbergs sold their home, moved to Collegeville, Pennsylvania, and incurred a transfer tax liability of $444. Because they moved out of the Village after transferring their property, none of the appellants received resident exemptions, and all made their transfer tax payments.
On March 20, 1995, Faust filed this lawsuit against the Village of Hoffman Estates to recover his allegedly unconstitutional tax payments. On April 9, 1995, the Stahls joined Faust's complaint; on November 19, 1995, the Silverbergs joined Faust's complaint. The appellants' third amended complaint requested legal and equitable relief from the Village's "enforcement and collection of an unconstitutional real estate transfer tax ***."
Specifically, this complaint alleged: "*** [T]he Defendant Village of Hoffman Estates' real estate transfer tax (i) violates the Commerce Clause, the Privileges and Immunities Clause, and the Equal Protection Clause of the United States Constitution; (ii) violates Plaintiffs' due process rights under the United States Constitution and Article I, Section II of the Constitution of the State of Illinois; and (iii) deprives Plaintiffs of their right to travel under the United States Constitution. Through these violations of Plaintiffs' civil rights under color of law, Defendants have violated 42 U.S.C. §1983. Finally, Defendant Village of Hoffman Estates' real estate transfer tax does not uniformly tax the subjects and objects of the tax in violation of Article IX, Section 2 of the Illinois Constitution."
Under the heading "COMMERCE CLAUSE," the complaint also alleged: "The Village of Hoffman Estates Municipal Code, Article 13-5, discriminates against interstate and intrastate commerce in violation of Article I, § 8 of the United States Constitution." (Emphasis added.)
On October 16, 1995, the Village of Hoffman Estates adopted ordinance 2768-1995, which said the exemption "shall be and is hereby repealed." Both sides in this case believe the repeal would not take effect unless the exemption were held invalid on the final order of a court of competent jurisdiction. We do not necessarily share that view, given the clear and specific words of repeal, but there is no ...