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No. 2--02--1290

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT

JUSTICE McLAREN delivered the opinion of the court:

Defendants, Glen Bower, as Director of the Department of Revenue, Judy Barr Topinka, asTreasurer of the State of Illinois, and the Illinois Department of Revenue (collectively, theDepartment), appeal from the trial court's order denying their motion for summary judgment andgranting the motion for summary judgment of plaintiff, American River Transportation Company(ARTCO). We affirm.

ARTCO operates a line of tugboats on the Mississippi, Illinois, and Ohio Rivers. In January2002, the Department of Revenue conducted an audit of ARTCO's tax liability under the Use Tax Act(UTA) (35 ILCS 105/1 et seq. (West 2000)) for the periods of July 1988 through November 1993and December 1993 through December 1999. The Department of Revenue concluded that ARTCOowed additional use tax, interest, and penalties, totaling $890,372, for diesel fuel and supplies usedby its tugboats during the periods in question. ARTCO paid the assessed amounts under protest andfiled a six-count complaint in the circuit court of DuPage County, seeking injunctive relief andalleging that the Department's imposition of the use tax violated the UTA and the United States andIllinois Constitutions. The parties filed cross-motions for summary judgment. The trial court grantedARTCO's motion and denied the Department's motion, finding that the Department's imposition ofthe tax "would be violative of the Interstate Commerce Clause" of the United States Constitution. This appeal followed.

The Department contends that the trial court erred in granting summary judgment to ARTCO. Summary judgment is appropriate when the pleadings, depositions, and admissions on file, togetherwith any affidavits, demonstrate that there exists no genuine issue as to any material fact and that themoving party is entitled to judgment as a matter of law. Whitt v. State Farm Fire & Casualty Co.,315 Ill. App. 3d 658, 661 (2000). A court considering such a motion must construe the pleadings,depositions, admissions, and affidavits strictly against the moving party and liberally in favor of thenonmoving party. Whitt, 315 Ill. App. 3d at 661. Summary judgment should be granted only wherethe movant's right to judgment is clear and free from doubt; where a reasonable person could drawdivergent inferences from undisputed facts, summary judgment should be denied. Whitt, 315 Ill. App.3d at 661. This court reviews de novo a trial court's ruling on summary judgment. Whitt, 315 Ill.App. 3d at 661-62. When the parties file cross-motions for summary judgment, this court is invitedto decide the issues presented as questions of law. Weber-Stephen Products, Inc. v. Department ofRevenue, 324 Ill. App. 3d 893, 898 (2001).

The UTA, along with the Retailers' Occupation Tax Act (ROTA) (35 ILCS 120/1 et seq.(West 2000)), provides for the Illinois "sales tax." Weber-Stephan Products, 324 Ill. App. 3d at 898. While the ROTA imposes an occupational tax on Illinois retailers (Weber-Stephan Products, 324 Ill.App. 3d at 898), the UTA imposes a tax "upon the privilege of using in this State tangible personalproperty purchased at retail from a retailer." 35 ILCS 105/3 (West 2000). If a retailer is locatedoutside Illinois and therefore has no UTA or ROTA obligations, the purchaser-user in Illinois mustpay the use tax directly to the State. Weber-Stephan Products, 324 Ill. App. 3d at 898-99. A saleat retail is defined as "any transfer of the ownership of or title to tangible personal property to apurchaser, for the purpose of use, and not for the purpose of resale ***, for a valuable consideration." 35 ILCS 105/2 (West 2000).

The Department argues that the trial court erred in concluding that the imposition of the usetax on ARTCO's use of fuel and supplies violated the commerce clause of the United StatesConstitution (U.S. Const., art. I,