Illinois Supreme Court upholds circuit court ruling in the City of Chicago et al., v. the City of Kankakee et al.

Scott Browdy, a partner at Schaumburg-based Lavelle Law, was lead defense counsel in the City of Chicago et al. v. the City of Kankakee, et al. On March 21, the Illinois Supreme Court ruled in the defendants' favor, overturned an Illinois Appellate Court Ruling adverse to the defendants, and upheld the original trial court finding in favor of the defendants.

Central to the case was the distribution of sales and use taxes for sales of goods and services with entities which have a sufficient physical presence in Illinois but out-of-state facilities from which Internet, telephone, and mail order sales are derived.

Under the Illinois Retailers' Occupation Tax Act (35 ILCS 120/1 et seq. (West 2016)), and the use tax authorized by the Use Tax Act sales revenues from sales by these entities are distributed among a variety of government entities including municipalities.

The case combined multiple suits against Browdy's clients, each of which challenged the accounting and distribution of those revenues and sought redistribution on sales to certain municipalities going back more than a decade.

"The City of Chicago and other municipalities attempted to sue our client and two smaller municipalities for allegedly misreporting state sales and use tax," said Browdy. "We argued that Chicago and the other municipal plaintiffs had no authority to enforce the state's revenue laws. Rather, the Illinois Department of Revenue has exclusive authority to assess taxes and enforce the state's tax laws. The Circuit Court, and ultimately the Illinois Supreme Court, found in our favor."

The case originated in 2011, and the plaintiffs sought tens of millions of dollars in allegedly misreported and misallocated sales and use tax revenue. The Illinois Supreme Court's decision effectively ends the case.

Scott Browdy handles tax and business disputes in Lavelle Law's Tax, Securities, and Litigation practice groups.

Lavelle Law's main office is in Schaumburg and maintains an additional office in the Chicago Loop. The firm was founded in 1989 as a single attorney practice with an emphasis on tax law. The firm has added more than a dozen practice groups including Estate Planning, Business Law, Banking Law, Litigation, Criminal, Immigration, Divorce and Family Law, Commercial and Residential Real Estate and Law Practice Consulting. The firm has received numerous awards and commendations for their business success, their commitment to ethics, national recognition for their pro bono services, and multiple acknowledgements of the charitable work they do in the local communities. For more information, visit www.lavellelaw.com or follow Lavelle Law on Twitter, Facebook and LinkedIn.