                                                                       THIRD DIVISION
                                                                       AUGUST 27, 2008

1-07-1204

US XPRESS LEASING, INC.,                                       )       Appeal from the
                                                               )       Circuit Court of
                Plaintiff-Appellant,                           )       Cook County.
                                                               )
        v.                                                     )       No. 06 L 50817
                                                               )
THE DEPARTMENT OF REVENUE,                                     )       Honorable
                                                               )       Rita M. Novak,
                Defendant-Appellee.                            )       Judge Presiding.


        JUSTICE CUNNINGHAM delivered the opinion of the court:

        The plaintiff, US Xpress, filed a complaint in the circuit court of Cook County against the

defendant, the state of Illinois, for review of an administrative law decision that barred its claim for

a refund pursuant to section 13 of the Illinois Motor Tax Fuel Law (35 ILCS 505/13 (West 2002))

(the Law). The circuit court of Cook County affirmed the administrative law decision. This appeal

followed. On appeal, the plaintiff argues that it is entitled to a refund for diesel fuel consumed

during off-highway idling pursuant to the Law. For the following reasons, we affirm the judgment

of the circuit court.

                                       BACKGROUND

        The plaintiff, US Xpress, is an interstate motor carrier corporation domiciled in Oklahoma

for the purposes of the International Fuel Tax Agreement (IFTA)1. The plaintiff operates commercial

        1
        “Under the IFTA, motor carrier owner-operators pay all their state fuel tax obligations
quarterly to their base state, the state in which they are registered. The base state then transfers
the appropriate funds to the taxing state, the state where the fuel tax liability was incurred. This
system prevents owner-operators from having to make multiple payments to different states in
which they operate. Illinois, as a taxing state, maintains IFTA fuel tax returns for only Illinois-
based taxpayers.” Owner-Operator Independent Drivers Ass’n v. Bower, 325 Ill. App. 3d 1045,
1049, 757 N.E.2d 627, 630 (2001).
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motor vehicles throughout Illinois and the United States. Pursuant to IFTA, the plaintiff filed a

quarterly motor fuel tax report with the state of Oklahoma and subsequently paid the state of Illinois

taxes on all fuel consumed within Illinois. All of the plaintiff’s vehicles are equipped with monitors

that record how much fuel each vehicle consumes on and off the public highways. Between April

1, 2001, and December 31, 2002, the plaintiff consumed 9,685,750 gallons of fuel in Illinois. Of that

total, 581,145 gallons of fuel were consumed while the plaintiff’s vehicles were off the public

highways and on private property, parked in the idle mode. Vehicles are generally parked in the idle

mode while being fueled, while cargo is being loaded or unloaded, or to sustain the temperature of

the cab.

       On July 7, 2003, the plaintiff filed a refund claim pursuant to section 13 of the Law (35 ILCS

505/13 (West 2002)) with the Illinois Department of Revenue, seeking a refund of $124,946. This

is the amount the plaintiff paid on the 581,145 gallons of fuel consumed by the plaintiff’s vehicles

while in the idle mode. The plaintiff moved for partial summary judgment arguing that the fuel

consumed while idling off public highways was not subject to taxation. The administrative law

judge disagreed. The judge explained that the Law provides for refund of motor fuel taxes paid

when motor fuel is used for a purpose other than operating a vehicle upon public highways. Since

there were no Illinois cases directly on point, the judge examined cases from the Indiana and

Wisconsin courts to define some pertinent terms of the Law. Relying on Roehl Transport, Inc. v.

Wisconsin Division of Hearings & Appeals, 213 Wis. 2d 452, 466, 570 N.W.2d 864, 870 (1997),

the judge explained that operation of a vehicle on a public highway within the context of IFTA was

much broader than mere propulsion down a highway, but rather included on-highway and off-

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highway idle time. The judge also explained, relying on Hi-Way Dispatch, Inc. v. Indiana

Department of State Revenue, 756 N.E.2d 587 (Ind. 2001), that idle time is when the engine of a

motor vehicle is running, but the vehicle is not moving, so that fuel is being consumed while the

vehicle remains stationary.

        Ultimately, the judge found that a rational reading of the statute indicates that the prohibition

of credit claims for idle time is directed to motor vehicles such as semi-tractors pulling trailers which

are intended for operation on public highways. The judge explained that the prohibition is intended

to bar motor vehicle operators from claiming credit for temporary idle time stops off public highways

for refueling, sleeping or for any other purpose The plaintiff subsequently filed a complaint in the

circuit court of Cook County for administrative review of that ruling. The circuit court affirmed the

administrative law judge’s decision. This appeal followed.

                                             ANALYSIS

        On appeal, the plaintiff argues that the administrative law judge’s decision misinterpreted

the Law and therefore a tax refund is owed to the plaintiff for the taxes paid while its vehicles were

in the idle mode within Illinois. The statute in question has not been challenged in this manner

previously. Hence, the administrative law judge’s review and reliance upon case law from

neighboring states in which the issue has been reviewed.

        Judicial review of an administrative agency’s decision extends to “all questions of law and

fact presented by the entire record before the court.” 735 ILCS 5/3-110 (West 2002). The standard

of review depends on whether the issue before the reviewing court is a question of law or fact or a

mixed question of law and fact. Elementary School District 159 v. Schiller, 221 Ill. 2d 130, 142, 849

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N.E.2d 349, 357 (2006). “An agency’s conclusion on a question of law is reviewed de novo.”

Elementary School District 159, 221 Ill. 2d at 142, 849 N.E.2d at 358. Although the reviewing court

is not bound by the administrative agency’s decision, the agency’s decision remains relevant where

there is a “reasonable debate” about the interpretation and meaning of the statute. Elementary

School District 159, 221 Ill. 2d at 142, 849 N.E.2d at 358.

       “The most fundamental rule in statutory construction is to give effect to the legislative

intent.” Murray v. Chicago Youth Center, 224 Ill. 2d 213, 235, 864 N.E.2d 176, 189 (2007). The

courts must construe a statute within its plain and ordinary meaning and may not alter its meaning

contrary to the plain meaning adopted by the legislature. Murray, 224 Ill. 2d at 235, 864 N.E.2d at

189.

       A claimant must prove its entitlement to any exemption, clearly and conclusively.

Wyndemere Retirement Community v. Department of Revenue, 274 Ill. App. 3d 455, 459, 654

N.E.2d 608, 612 (1995). “In analyzing an exemption, all facts are to be construed and all debatable

questions resolved in favor of taxation.” Wyndemere Retirement Community, 274 Ill. App. 3d at

459, 654 N.E.2d at 612.

       At issue in this case is whether fuel consumed during off-highway idling by commercial

vehicles that operate upon Illinois’ public highways is exempt from taxes under section 13 of the

Law. The plaintiff argues that the Law clearly grants the tax exemption for fuel consumed “for any

purpose other than operating a motor vehicle upon [Illinois] public highways.” The plaintiff

contends that the language prohibiting a refund for fuel consumed in Illinois during idle time has no

impact on fuel consumed on private property.

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       The Law imposes a tax on the privilege of operating a motor vehicle on the public highways

of Illinois. Owner-Operator Independent Drivers Ass’n, 325 Ill App. 3d at 1048, 757 N.E.2d at 630.

Section 13a of the Law imposes a tax on the motor fuel consumed on Illinois highways by

commercial motor vehicles. 35 ILCS 505/13a (West 2002). The state of Illinois also facilitates a

program that provides tax-free dyed diesel fuel to be consumed for any special or non-highway

purpose. 35 ILCS 505/5 (West 2002).2 Additionally, the Law may allow a purchaser to request a

tax refund for taxes paid on undyed diesel fuel. In some cases it is not practical to use dyed diesel

fuel for various purposes. In that case, the undyed diesel fuel may be purchased, tax-paid, and the

purchaser may request a tax refund from the Illinois Department of Revenue. 86 Ill. Adm. Code

§500.206, added at 24 Ill. Reg. 6918, eff. April 21, 2000.

       Pursuant to section 13 of the Law, one may obtain a refund for taxes paid on undyed motor

fuel used for any purpose other than operating a motor vehicle upon the public highways. 35 ILCS

505/13 (West 2002). We review at length section 13, which states in pertinent part:

                       “Any person other than a distributor or supplier, who loses


       2
         On September 1, 2000, the state of Illinois implemented a dyed diesel fuel program
which requires that all diesel fuel used for nontaxable, nonhighway purposes, contain red dye.
The red dye is an enforcement identifier used during field audits and inspections. An end user
customer may purchase tax-free dyed diesel fuel from a licensed distributor or supplier. The end
user customer must provide the licensed distributor or supplier with personal and business
identification and the purpose for the use of the dyed diesel fuel. The licensed distributor or
supplier must then provide all of the dyed diesel fuel sales information to the Illinois Department
of Revenue. The Illinois Department of Revenue conducts field audits and inspections to ensure
the proper tax-free usage of dyed diesel fuel. End user customers that violate the usage
guidelines by selling dyed diesel fuel or using it for an improper purpose are subject to fines
and/or a felony conviction.


                                                 5
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            motor fuel through any cause or uses motor fuel (upon which he has

            paid the amount required to be collected under Section 2 of this Act)

            for any purpose other than operating a motor vehicle upon the public

            highways or waters, shall be reimbursed and repaid the amount so

            paid.

                    ***

                    Claims for such reimbursement must be made to the

            Department of Revenue, duly verified by the claimant (or by the

            claimant's legal representative if the claimant has died or become a

            person under legal disability), upon forms prescribed by the

            Department. The claim must state such facts relating to the purchase,

            importation, manufacture or production of the motor fuel by the

            claimant as the Department may deem necessary, and the time when,

            and the circumstances of its loss or the specific purpose for which it

            was used (as the case may be), together with such other information

            as the Department may reasonably require. No claim based upon idle

            time shall be allowed.

                                           ***

                    For claims based upon taxes paid on or after January 1, 2000,

            a claim based upon the use of undyed diesel fuel shall not be allowed

            except (i) if allowed under the preceding paragraph or (ii) for claims

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            for the following:

                   (1) Undyed diesel fuel used (i) in a manufacturing process, as

            defined in Section 2-45 of the Retailers' Occupation Tax Act, wherein

            the undyed diesel fuel becomes a component part of a product or by-

            product, other than fuel or motor fuel, when the use of dyed diesel

            fuel in that manufacturing process results in a product that is

            unsuitable for its intended use or (ii) for testing machinery and

            equipment in a manufacturing process, as defined in Section 2-45 of

            the Retailers' Occupation Tax Act, wherein the testing takes place on

            private property.

                   (2) Undyed diesel fuel used by a manufacturer on private

            property in the research and development, as defined in Section 1.29,

            of machinery or equipment intended for manufacture.

                   (3) Undyed diesel fuel used by a single unit self-propelled

            agricultural fertilizer implement, designed for on and off road use,

            equipped with flotation tires and specially adapted for the application

            of plant food materials or agricultural chemicals.

                   (4) Undyed diesel fuel used by a commercial motor vehicle for

            any purpose other than operating the commercial motor vehicle upon

            the public highways. Claims shall be limited to commercial motor

            vehicles that are operated for both highway purposes and any

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            purposes other than operating such vehicles upon the public

            highways.

                    (5) Undyed diesel fuel used by a unit of local government in

            its operation of an airport if the undyed diesel fuel is used directly in

            airport operations on airport property.

                    (6) Undyed diesel fuel used by refrigeration units that are

            permanently mounted to a semitrailer, as defined in Section 1.28 of

            this Law, wherein the refrigeration units have a fuel supply system

            dedicated solely for the operation of the refrigeration units.

                    (7) Undyed diesel fuel used by power take-off equipment as

            defined in Section 1.27 of this Law.

                    (8) Beginning on the effective date of this amendatory Act of

            the 94th General Assembly, undyed diesel fuel used by tugs and

            spotter equipment to shift vehicles or parcels on both private and

            airport property. Any claim under this item (8) may be made only by

            a claimant that owns tugs and spotter equipment and operates that

            equipment on both private and airport property. The aggregate of all

            credits or refunds resulting from claims filed under this item (8) by a

            claimant in any calendar year may not exceed $100,000. A claim may

            not be made under this item (8) by the same claimant more often than

            once each quarter. For the purposes of this item (8), ‘tug’” means a

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                vehicle designed for use on airport property that shifts custom-

                designed containers of parcels from loading docks to aircraft, and

                ‘spotter equipment’ means a vehicle designed for use on both private

                and airport property that shifts trailers containing parcels between

                staging areas and loading docks.” (Emphasis added.) 35 ILCS

                505/13 (West 2006).

        The plaintiff contends that the Law does not prohibit its recovery of the tax refund for fuel

consumed during off-highway idling within the state of Illinois, despite the clause that provides “[n]o

claim based on idle time shall be allowed.” The plaintiff argues that this clause is applicable only

to vehicles idling on the public highways. It contends that fuel consumed in Illinois off public

highways or on private property is not subject to taxation under the Law. The State argues that the

Law clearly and unambiguously states that a claim for a tax refund based on idle time by the

plaintiff’s vehicles, within the state of Illinois, is not allowed. The State explains that section 13 of

the Law sets forth specific uses for undyed diesel fuel that qualifies for a tax refund and it does not

include refunds for commercial motor vehicles such as those owned and operated by the plaintiff

within Illinois when those vehicles exit the public highways for refueling, cargo loading, or cab

climate control.

        Section 500.235(i) of Title 86 of the Administrative Code (86 Adm. Code §500.235(i),

amended at 26 Ill. Reg. 9912, eff. June 24, 2002), elaborates on the exemption and states that “[t]he

Department will approve claims for a tax refund only when such claims are based upon a showing

that such motor fuel was used for a nontaxable purpose ***. *** Only claims that can be supported

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by proof of the amount of motor fuel not used for a taxable purpose will be approved.” (Emphasis

added.)

          In this case, we agree with the State that section 13 of the Law does not designate tax refunds

for fuel consumed by commercial motor vehicles operating within the state of Illinois such as those

owned and operated by the plaintiff, during off-highway idling. The plaintiff erroneously contends

that the clause “for any purpose other than operating the commercial motor vehicle upon the public

highway,” includes a vehicle idling on private property. This interpretation is extremely narrow and

is inconsistent with the Law and the intent of the legislature. When read as a whole, the Law

imposes a tax on motor fuel consumed by by commercial motor vehicles while operating in Illinois.

However, the legislature created exemptions from the tax for fuel consumed for special or

nonhighway purposes. 35 ILCS 505/5 (West 2002). Section 13 of the Law offers a tax refund for

fuel consumed “for any purpose other than operating a motor vehicle upon the public highways,”and

sets forth enumerated purposes of consumption that determine eligibility for the tax exemption. 35

ILCS 505/13 (West 2002). These enumerated purposes are not specific locations of consumption,

but rather specific purposes of fuel consumption.

           It is clear that the legislature has based the tax exemption on the nontaxable consumption

of fuel as it is defined by the Law and not merely the location of the fuel consumption. Section

500.235 of Title 86 of the Administrative Code (86 Adm. Code §500.235, amended at 26 Ill. Reg.

9912, eff. June 24, 2002), supports this interpretation by requiring that claimants seeking a section

13 tax refund must demonstrate how the fuel was consumed for a defined nontaxable purpose.

          Under the plaintiff’s interpretation, taxes paid on all fuel consumed by commercial motor

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vehicles while operating in Illinois, but off public highways, is refundable. The plaintiff suggests

that this interpretation is consistent with the Law, specifically the dyed fuel program that provides

tax-free fuel for off-highway consumption. The plaintiff is clearly suggesting an extremely narrow

interpretation of the Law without considering the consequences of such a narrow reading. As stated,

the general purpose of the Law is to tax fuel consumed by commercial vehicles on Illinois highways.

        Owners of vehicles that participate in the dyed fuel program, such as farmers that use tractors

for farming, are granted a tax exemption based on the purpose of their fuel consumption. Farmers

usually do not operate commercial motor vehicles of the type which are owned and operated by the

plaintiff. To the extent that they use undyed fuel to conduct the activities of farming, the Law may

provide an exemption to the taxes as outlined in section 13 of the Law. During oral arguments the

plaintiff contended that dyed fuel could never be consumed on Illinois highways because fuel

consumed while driving on the highway is always taxable. The plaintiff argued that if a farmer

participated in the dyed fuel program and thereafter drove his tractor on a public roadway to reach

his field on the other side of the road, he would be fined and taxed for consuming the fuel “on-

highway.” We disagree with the plaintiff’s reasoning as this would lead to an absurd result, which

is not within the legislative intent. Clearly, the Law seeks to grant tax exemptions for fuel consumed

for nontaxable purposes as defined by the statute, consistent with the intent of the legislature, not the

location of the fuel consumed.

        The plaintiff’s interpretation of section 13 would only forbid refunds for on-highway idling.

Under the plaintiff’s reasoning, commercial carriers would only be prohibited from seeking a refund

for fuel consumed in Illinois when their vehicles sit idle in traffic. This is clearly contrary to the

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overall purpose of the Law. The section 13 tax refund is available for fuel consumed in Illinois for

nontaxable purposes. Nontaxable purposes are defined by the Law itself, the Administrative Code

and review of the legislative intent. Thus, section 13 clearly and unambiguously prohibits receiving

a tax refund for fuel consumed in Illinois by commercial vehicles while idling whether that idling

takes place on a public highway or on private property. It is the purpose for which the motor vehicle

is being used within the state of Illinois that dictates its fuel tax status.

        We hold that the administrative law judge and the circuit court correctly found that the

plaintiff was ineligible for a section 13 tax refund. For the foregoing reasons, we affirm the

judgment of the circuit court of Cook County.

        Affirmed.

        GREIMAN and THEIS, JJ., concur.




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