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Grand Chapter, Order of Eastern Star v. Topinka

Supreme Court of Illinois

January 23, 2015

GRAND CHAPTER, ORDER OF THE EASTERN STAR OF THE STATE OF ILLINOIS, Appellee,
v.
JUDY BAAR TOPINKA et al., Appellants

Reversed.

SYLLABUS

State taxation of a nonprofit nursing home by imposition of a " bed fee" was upheld against a challenge brought under the uniformity clause of the Illinois Constitution, but the legislature was encouraged to reconsider the question in light of the benefits provided to the State.

Lisa Madigan, Attorney General, of Springfield (Carolyn E. Shapiro, Solicitor General, and Evan Siegel, Assistant Attorney General, of Chicago, of counsel), for appellants.

Darrell A. Woolums and Bridget C. Hogan, of Samuels, Miller, Schroeder, Jackson & Sly, LLP, of Decatur, for appellee.

JUSTICE THOMAS delivered the judgment of the court, with opinion. Chief Justice Garman and Justices Freeman, Kilbride, Karmeier, Burke, and Theis concurred in the judgment and opinion.

OPINION

THOMAS, JUSTICE

Page 622

The issue is whether, as applied in this case, section 5E-10 of the Illinois Public Aid Code (Code) (305 ILCS 5/5E-10 (West 2012)), which taxes the licensed beds of all Illinois nursing home providers, violates the uniformity clause of the Illinois Constitution (Ill. Const. 1970, art. IX, § 2). We hold that it does not.

BACKGROUND

Plaintiff, Grand Chapter, Order of the Eastern Star of the State of Illinois, is an Illinois fraternal organization and not-for-profit corporation that is recognized as tax-exempt under section 501(c)(10) of the federal Internal Revenue Code (26 U.S.C. § 501(c)(10) (1988)). Plaintiff owns, operates, and maintains the Eastern Star Home, a nursing home in Macon, Illinois (Eastern Star). Eastern Star is licensed by the Illinois Department of Public Health, which also has granted Eastern Star a permit to enter into life care contracts under the Life Care Facilities Act (210 ILCS 40/1 et seq. (West 2012)).

In May 2002, the Department of Public Aid (Department) sent a letter to Grand Chapter directing it to pay the " Nursing Home License Fee" established in section 5E-10 of the Code (the bed fee). Section 5E-10 provides, in relevant part:

" [e]very nursing home provider shall pay to [the Department] on or before September 10, December 10, March 10, and June 10, a fee in the amount of $1.50 for each licensed nursing bed day for the calendar quarter in which the payment is due." 305 ILCS 5/5E-10 (West 2012).[1]

In October 2002, the Department sent Grand Chapter another letter stating that Grand Chapter was delinquent in its payment of the bed fee going back to 1993 and that it owed the Department $244,233 in back fees and an additional $237,890 in penalties. Grand Chapter responded by paying its liability under protest and by filing a declaratory judgment action seeking to ...


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