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Southwestern Bell Mobile Systems, Inc. v. Department of Revenue

Case Date: 06/16/2000
Court: 1st District Appellate
Docket No: 1-99-2122

Southwestern Bell Mobile Systems, Inc. v. Dept. of Revenue, No. 1-99-2122

1st District, June 16, 2000

SIXTH DIVISION

SOUTHWESTERN BELL MOBILE SYSTEMS, INC., DECATUR CELLULAR TELEPHONE COMPANY, CHAMPAIGN CELLTELCO, SBMS CELLULAR TELECOMMUNICATIONS BLOOMINGTON, INC., SBMS CELLULAR TELECOMMUNICATIONS SPRINGFIELD, INC., and EASTERN MISSOURI CELLULAR LIMITED PARTNERSHIP,

Plaintiffs-Appellees,

v.

THE DEPARTMENT OF REVENUE OF THE STATE OF ILLINOIS and GLEN BOWER, Director,

Defendant-Appellant.

 APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY.

HONORABLE JOANNE L. LANIGAN, JUDGE PRESIDING.

JUSTICE CAMPBELL delivered the opinion of the court:

Defendants Illinois Department of Revenue (Department) and Glen Bower, Director of the Department appeal an order of the circuit court of Cook County in administrative review reversing the Department's decision that plaintiffs Southwestern Bell Mobile Systems, Inc., Decatur Cellular Telephone Company, Inc., Champaign Celltelco, SBMS Cellular Telecommunications Bloomington, Inc., SBMS Cellular Telecommunications Springfield, Inc., and Eastern Missouri Cellular Limited Partnership (collectively Taxpayers) were not entitled to a refund of invested capital tax payments for tax years 1991-94.

The record on appeal discloses the following facts. Southwestern Bell Mobile Systems, Inc., is a Delaware corporation providing cellular telephone service in the Chicago metropolitan area under the name Cellular One. The remaining Taxpayers are limited partnerships in which Southwestern Bell Mobile Systems, Inc. holds a controlling interest. The remaining taxpayers provide cellular telephone service in parts of Illinois outside the Chicago metropolitan area.

In 1979, the General Assembly imposed a tax on the invested capital of persons engaged in transmitting messages and acting as retailers of telecommunications. See 35 ILCS 610/2a.1 (West 1994). In 1986, the General Assembly amended section 13-203 of the Universal Telephone Service Protection Law of 1985, part of the larger Public Utilities Act, to provide in part that:

"The [Illinois Commerce] Commission [ICC] may, by rulemaking, exclude *** cellular radio service *** from active regulatory oversight to the extent it finds *** that such exclusion is consistent with the public interest and the purposes and policies of this Article." See 220 ILCS 5/13-203 (West 1996).

On February 18, 1987, the ICC entered an order removing the cellular industry in Chicago from active regulatory oversight. See In re Chicago SMSA Ltd. Partnership, 81 Pub. Util. Rep. 4th 287 (1987); 1987 Ill PUC LEXIS 10; 1987 WL 256497. The ICC later extended this order to the entire cellular industry in Illinois. See 83 Ill. Admin. Code