Challenge to School Facility Occupation Tax Is Allowed to Proceed 

The Illinois Appellate Court has allowed a lawsuit to proceed challenging the constitutionality of Public Act 95-0675 (which created the County School Facility Occupation Tax Law). 

In P&S Grain, LLC v. County of Williamson, et al., No. 5-09-0079, -- N.E.2d --, 2010 WL 1374925 (5^th Dist. Apr. 2, 2010), two retailers filed a lawsuit to challenge a 1% school facility occupation tax imposed by Williamson County.  The retailers argued that the tax unconstitutionally violated municipal home-rule status and also argued that the county failed to follow the necessary procedures for implementing the tax.  However, the county and other parties contended that the retailers lacked standing to bring the lawsuit because the retailers were not "citizens" under Illinois law and also because the costs of the tax would be paid by consumers, not by the retailers themselves. 

The appellate court rejected the defendants' arguments and found that the retailers were corporate entities that were adversely affected by the taxes, which was enough to establish standing to bring the lawsuit.  The court was careful to note that in allowing the lawsuit to go forward, it was not making any ruling or comment about its ultimate outcome.  Accordingly, the trial court may now consider the constitutionality and propriety of the school facility occupation tax in this case.  If you have any questions regarding this case or regarding the school facility occupation tax, please contact Steve Richart or Heather Brickman.