Court of Appeals of Illinois, First District, Fourth Division
MICHAEL L. SHAKMAN, Individually and as Trustee of the Michael L. Shakman Revocable Trust, Plaintiff-Appellant,
THE DEPARTMENT OF REVENUE and MICHAEL FRERICHS, in His Official Capacity as Treasurer of the State of Illinois, Defendants-Appellees.
from the Circuit Court of Cook County No. 18 L 50106
Honorable James M. McGing, Judge presiding.
Attorneys for Appellant: Michael L. Shakman and Diane F.
Klotnia, of Miller Shakman & Beem LLP, of Chicago, for
Attorneys for Appellees: Kwame Raoul, Attorney General, of
Chicago (Jane Elinor Notz, Solicitor General, and Carl J.
Elitz, Assistant Attorney General, of counsel), for
JUSTICE BURKE delivered the judgment of the court, with
opinion. Presiding Justice Gordon and Justice Reyes concurred
in the judgment and opinion.
1 This appeal concerns Illinois's Aircraft Use Tax Law
(35 ILCS 157/10-1 et seq. (West 2018)), which
imposes a 6.25% tax "on the privilege of using" an
aircraft in Illinois "acquired by gift, transfer, or
purchase" unless certain statutory exemptions apply.
2 In 2008, Michael L. Shakman bought an aircraft and paid a
corresponding general use tax. Several years later, using a
bill of sale, he changed the legal ownership of that aircraft
to himself as trustee of his revocable trust and filed the
bill of sale with the Federal Aviation Administration (FAA).
Shakman, however, did not pay a use tax. The Department of
Revenue (Department) monitors FAA's records, noticed the
change in legal ownership, and sent Shakman a notice of tax
liability under the Aircraft Use Tax Law. Shakman paid the
tax under protest and sued the Department and Michael
Frerichs, as Treasurer of the State of Illinois, for a
declaratory judgment that the second use tax was improper. On
the parties' cross-motions for summary judgment, the
circuit court found that the Department properly imposed the
tax pursuant to the Aircraft Use Tax Law. The court
accordingly granted the Department and Frerichs's motion
for summary judgment and denied Shakman's motion.
3 The sole issue on appeal is whether the Department properly
imposed the tax pursuant to the Aircraft Use Tax Law after
Shakman changed the legal ownership of the aircraft from
himself individually to himself as trustee of his revocable
trust. Because we find Shakman's change of ownership is a
taxable event under the broad language of the Aircraft Use
Tax Law and he has not contended any of the statutory
exemptions apply, we affirm the judgments of the circuit
4 I. BACKGROUND
5 In 1990, Shakman created the Michael L. Shakman Revocable
Trust. In 2007, Shakman amended and restated the trust in its
entirety. In the restatement, in addition to being the
trust's settlor, he named himself trustee and was the
beneficiary during his lifetime. Upon his death, however, his
trust property would pass to a marital trust benefitting his
wife and a bypass trust benefitting his children.
Additionally, Shakman's trust expressly provided him the
power to revoke or amend the instrument at any time.
6 In 2008, Shakman individually purchased a Schleicher glider
aircraft. Afterward, he registered the aircraft with the
Department of Transportation and filed a general use tax
return with the Department for $7370.
7 In 2014, as part of Shakman's estate planning, he
sought to change ownership of the aircraft from himself
individually to himself as trustee of his trust. To do so, he
completed an aircraft bill of sale using a preprinted form
from the FAA. According to the bill of sale, Shakman
individually did "hereby sell, grant, transfer and
deliver all rights, title and interests in and to such
aircraft unto" himself "as trustee of Michael L.
Shakman Revocable Trust *** for and in consideration of $1
OVC," with OVC apparently meaning other valuable
consideration. Shakman subsequently filed the bill of sale
with the FAA. According to a declaration that Shakman filed
in conjunction with the eventual litigation in this case,
after the change in legal ownership, he personally paid all
costs associated with the maintenance and operation of the
aircraft just as he did before the change of ownership.
8 At some point after filing the bill of sale with the FAA,
the Department, which monitors aircraft title records of the
FAA, noticed the change of ownership to Shakman's
aircraft. Because the Department believed that the change was
a taxable event under the Aircraft Use Tax Law, it sent
Shakman's trust a notice of tax liability of $7511.01, a
figure that included the aircraft use tax as well as a
penalty for the nonpayment and interest. Shakman, on behalf
of his trust, paid the Department $7511.63 under protest, a
number slightly higher because Shakman believed the
Department made an error in calculating the interest.
9 In March 2018, Shakman, individually and as trustee of his
trust, filed a two-count complaint against the Department and
Frerichs (collectively, defendants). In count I, Shakman
sought a declaration that the Department's imposition of
an aircraft use tax was improper and a declaration to have
the Department refund him the amount he paid under protest
with interest. In count II, Shakman sought a preliminary and
permanent injunction barring the Department from transferring
the amount he paid under protest from a protest fund. Shakman
also separately filed a motion for a preliminary injunction.
Later that month, the circuit court granted Shakman's
motion for a preliminary injunction and ordered that
defendants maintain the amount Shakman paid under protest in
a protest fund pending resolution of the litigation.
10 After defendants answered Shakman's complaint, the
parties filed cross-motions for summary judgment. Ultimately,
the circuit court concluded that whenever an aircraft owner
in Illinois filed a bill of sale with the FAA, the owner
would incur a tax under the Aircraft Use Tax Law unless a
statutory exemption applied. According to the court, the
bright-line rule was consistent with the language of the
Aircraft Use Tax Law and would lead to predictability in
taxation. Based on the rule, the court found that the
Department's imposition of an aircraft use tax for
Shakman changing the legal ownership of his aircraft was
proper despite him being taxed a second time for the use of
the aircraft simply as a result of routine estate planning.
The court accordingly granted defendants' motion for
summary judgment and denied Shakman's motion.
11 Shakman timely appealed.
12 II. ANALYSIS
13 Shakman contends that the circuit court erred in finding
that his change of ownership of his aircraft from himself
individually to himself as trustee of his revocable trust was
a taxable event under the Aircraft Use Tax Law. Shakman
therefore argues that the court erred in resolving the
parties' cross-motions for summary judgment.
14 A. Legal Principles
15 By the parties' filing of cross-motions for summary
judgment, they agree that there is only a question of law
involved and invite the court to resolve the litigation based
solely upon the record. Pielet v. Pielet, 2012 IL
112064, ¶ 28. The circuit court should only grant
summary judgment where the pleadings, depositions,
admissions, and affidavits on file, when viewed in the light
most favorable to the nonmoving party, demonstrate that there
is no genuine issue of any material fact and the moving party
is entitled to judgment as a matter of law. Id.
16 Whether the circuit court properly resolved the
parties' cross-motions for summary judgment turns on an
issue of statutory construction. When interpreting a statute,
our primary objective is to determine and effectuate the
intent of our legislature, "the surest and most reliable
indicator of which is the statutory language itself, given
its plain and ordinary meaning." Board of Education
of Springfield School District No. 186 v. Attorney
General, 2017 IL 120343, ¶ 24. When construing
statutes related "to the collection of taxes, the policy
of this court has been to give them a common sense meaning so
as to avoid making collection difficult or impossible."
Department of Revenue v. Joseph Bublick & Sons,
Inc., 68 Ill.2d 568, 575 (1977). But also "[a] tax
statute must be strictly construed against the government and
in favor of the taxpayer." Kankakee County Board of
Review v. Property Tax Appeal Board, 226 Ill.2d 36, 52
(2007). If the statutory language is unambiguous, we must
apply the statute as written without resorting to external
aids of statutory construction. Board of Education of
Springfield, 2017 IL 120343, ¶ 24. If, however, the
statutory language is ambiguous, we may utilize extrinsic
aids of statutory construction to determine the intent of our
legislature. Id. ¶ 25.
17 We review the circuit court's ruling on cross-motions
for summary judgment de novo. Pielet, 2012 IL
112064, ¶ 30. Similarly, when tasked with interpreting
and construing the meaning of a statute, we do so de
novo. Id. As this case involves the intersection of tax
law and trusts law, we must provide some initial background
about both in order to provide the ...