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City of Chicago v. Wendella Sightseeing, Inc.

Court of Appeals of Illinois, First District, Fifth Division

June 28, 2019

THE CITY OF CHICAGO, a Municipal Corporation, Through Its Department of Finance, Plaintiff-Appellant,
v.
WENDELLA SIGHTSEEING, INC., and THE CITY OF CHICAGO DEPARTMENT OF ADMINISTRATIVE HEARINGS, Defendants-Appellees.

          Appeal from the Circuit Court of Cook County No. 17 L 050497 Honorable Carl Anthony Walker, Judge, presiding.

          PRESIDING JUSTICE ROCHFORD delivered the judgment of the court, with opinion. Justices Hoffman and Hall concurred in the judgment and opinion.

          OPINION

          ROCHFORD PRESIDING JUSTICE

         ¶ 1 This administrative review action addressed whether Wendella Sightseeing, Inc. (Wendella), a tour boat operator, was required to collect amusement taxes from its patrons and remit them to the City of Chicago (City) for the years 2006-13, and in what amount. Wendella had failed to collect and remit any amusement taxes from 2006 to 2012; for 2012-13, Wendella collected amusement taxes from its patrons but only remitted a portion thereof to the City, after applying a credit on its patrons' behalf for the monies it had paid the City in docking fees. The City of Chicago Department of Administrative Hearings (DOAH) found that Wendella was not required to collect and remit amusement taxes from 2006 to 2012 because the amusement tax ordinance allowing for the City's levying of such taxes was preempted by 33 U.S.C. § 5(b), as amended by section 445 of the Maritime Transportation Security Act of 2002 (MTSA) (33 U.S.C. § 5(b) (2006)). With respect to the amusement tax that Wendella actually collected from its patrons and remitted to the City in 2012-13, the DOAH found that Wendella's patrons were entitled to a credit against the tax for docking fees that Wendella had paid to the City. On administrative review, the circuit court affirmed. The City appeals, contending that the DOAH erred in finding that (1) Wendella was not required to collect and remit amusement taxes from 2006 to 2012 because the amusement tax ordinance as applied to Wendella was preempted by section 5(b) after MTSA and (2) as to the amusement tax that Wendella actually collected on its patrons' behalf and remitted to the City in 2012-13, Wendella's patrons were entitled to a credit for docking fees paid to the City. We affirm.[1]

         ¶ 2 For ease of analysis, we begin by setting forth the relevant law in this case.

         ¶ 3 I. The Ordinance and Federal Statute at Issue

         ¶ 4 A. The Chicago Amusement Tax Ordinance Provisions

         ¶ 5 Section 4-156-020(A):

"Except as otherwise provided by this article, an amusement tax is imposed upon the patrons of every amusement within the city. The rate of the tax shall be equal to nine percent of the admission fees or other charges paid for the privilege to enter, to witness, to view or to participate in such amusement ***." Chicago Municipal Code § 4-156-020(A) (amended at Chi. City Clerk J. Proc. 48247 (Nov. 19, 2008)).

         ¶ 6 Section 4-156-010:

" 'Amusement' means: (1) any exhibition, performance, presentation or show for entertainment purposes, including *** riding on animals or vehicles ***." Chicago Municipal Code § 4-156-010 (amended at Chi. City Clerk J. Proc. 15024 (Nov. 13, 2007)).
" 'Patron' means a person who *** acquires the privilege to enter, to witness, to view or to participate in an amusement." Chicago Municipal Code § 4-156-010 (amended at Chi. City Clerk J. Proc. 15824 (Nov. 13, 2007)).

         ¶ 7 Section 4-156-030(A):

"It shall be the joint and several duty of every owner, manager or operator of an amusement *** to secure from each patron the [amusement tax] and to remit the tax to the department of revenue ***." Chicago Municipal Code § 4-156-030(A) (amended at Chi. City Clerk J. Proc. 15824-25 (Nov. 13, 2007)).

         ¶ 8 B. Section 5(b) After MTSA

         ¶ 9 Section 5(b) after MTSA provides:

"No taxes, tolls, operating charges, fees, or any other impositions whatever shall be levied upon or collected from any vessel or other water craft, or from its passengers or crew, by any non-Federal interest, if the vessel or water craft is operating on any navigable waters subject to the authority of the United States, or under the right to freedom of navigation on those waters, except for
(1) fees charged [for certain port or harbor dues];
(2) reasonable fees charged on a fair and equitable ...

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