                         ILLINOIS OFFICIAL REPORTS
                                       Appellate Court




                  Interstate Trucks, LLC v. State, 2011 IL App (4th) 100603




Appellate Court           INTERSTATE TRUCKS, LLC, Plaintiff-Appellant, v. THE STATE OF
Caption                   ILLINOIS, Acting Through the DEPARTMENT OF REVENUE, and
                          BRIAN A. HAMER, Director, Defendants-Appellees.



District & No.            Fourth District
                          Docket No. 4–10–0603


Filed                     June 14, 2011


Held                       The trial court’s decision affirming the Department of Revenue’s
(Note: This syllabus       determination that the trucks plaintiff dealer purchased in Illinois for
constitutes no part of the resale at its dealership in Tennessee and drove back to Tennessee needed
opinion of the court but   single-trip permits was reversed by the appellate court, since the trucks
has been prepared by the did not fit the definition of “commercial motor vehicle” in section 1.16
Reporter of Decisions for of the Motor Fuel Tax Law, and, furthermore, plaintiff was not required
the convenience of the     to purchase the single-trip permits as reimbursement to the State of
reader.)                   Illinois for the motor-fuel-use tax because fuel for the trucks was
                           purchased in Illinois, as evidenced by an affidavit of plaintiff’s owner.


Decision Under            Appeal from the Circuit Court of Sangamon County No. 09–MR–349; the
Review                    Hon. John W. Belz, Judge, presiding.



Judgment                  Reversed.
Counsel on                  Duane D. Young (argued), of LaBarre, Young & Behnke, of
Appeal                      Springfield, for appellant.

                            Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro,
                            Solicitor General, and Eric Truett (argued), Assistant Attorney
                            General, of counsel), for appellees.


Panel                       PRESIDING JUSTICE KNECHT delivered the judgment of the court,
                            with opinion.
                            Justices Steigmann and Cook concurred in the judgment and opinion.




                                              OPINION

¶1           Plaintiff, Interstate Trucks, LLC, appeals the decision of the Illinois Department of
        Revenue (Department) affirming the Department’s issuance of four notices of tax liability
        in the amount of $1,000 per notice for plaintiff’s failure to obtain and display single-trip
        permits as required under section 13a.5 of the Motor Fuel Tax Law (Tax Law) (35 ILCS
        505/13a.5 (West 2006)).
¶2           Plaintiff sought administrative review and the circuit court affirmed the Department.
        Plaintiff appeals, claiming the Department erred in the following respects: (1) it erred in its
        construction of section 13a.5 of the Tax Law because it held “a single trip through the State
        of Illinois” included trucks purchased and fueled in Illinois and then driven to Tennessee, and
        (2) it erred in not recognizing the exception established in section 1.16 of the Tax Law (35
        ILCS 505/1.16 (West 2006)). For the following reasons, we reverse the circuit court’s
        decision affirming the Department’s decision.

¶3                                          I. BACKGROUND
¶4          Plaintiff was a truck dealer with its sole place of business in the State of Tennessee. In
        March 2007, plaintiff purchased five trucks from Central Illinois Trucks, Inc., located in
        Springfield, Illinois. These trucks were purchased for resale at plaintiff’s dealership in
        Tennessee.
¶5          Later in March 2007, plaintiff arranged for its agents to transport the purchased trucks
        from Springfield, Illinois, to its dealership in Tennessee. In preparation for the transportation
        of the trucks, Central Illinois Trucks, Inc., provided the trucks with seven-day permits ($10
        each) as required under section 3–811(c) of the Illinois Vehicle Code (625 ILCS 5/3–811(c)
        (West 2006)), “which were acquired by the seller, in bulk, from the Illinois Secretary of
        State.” The seven-day permits allowed plaintiff to lawfully operate the trucks purchased in

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       Illinois on Illinois highways. 625 ILCS 5/3–811 (West 2006).
¶6          When plaintiff’s agents were transporting the trucks to Tennessee, four of the trucks were
       stopped by agents in the Department’s Bureau of Criminal Investigations at mile post 46 on
       Interstate 57. As a result of the stop, the Department issued four notices of tax liability to
       plaintiff because plaintiff had failed to acquire motor-fuel-use-tax licenses (price dependent
       on whether reinstatement fee is due and whether applicant is required to post bond) or single-
       trip permits ($20 each) before transporting the trucks as required under sections 13a.4 and
       13a.5 of the Tax Law (35 ILCS 505/13a.4, 13a.5 (West 2006)). The seven-day permits
       plaintiff had obtained for the trucks were not sufficient to cover any motor-fuel-use tax due.
¶7          Plaintiff protested the issuance of the notices of tax liability and requested a hearing with
       the Department. Prior to the hearing, the parties stipulated (1) plaintiff was a truck dealer
       having no place of business in the State of Illinois; (2) the trucks were purchased from
       Central Illinois Trucks, Inc., for resale at plaintiff’s Tennessee dealership; (3) the trucks were
       stopped by the Department; (4) the trucks had seven-day permits issued by the Illinois
       Secretary of State to drive them from one dealership to another; (5) plaintiff was not a
       common carrier and not in the business of transporting persons or property for hire; (6) the
       vehicles in question were exiting the State of Illinois and traveling to plaintiff’s business in
       the State of Tennessee; (7) the trucks in question were semi-tractors and not pulling any
       trailers or cargo; and (8) none of the trucks had motor-fuel-vehicle-tax licenses and display
       decals.
¶8          Additionally, prior to the hearing, the parties agreed Bruce Thomas, manager of Central
       Illinois Trucks, Inc., would not be called as a witness at the hearing and, instead, his
       testimony would be admitted into evidence through an affidavit. In the affidavit, Thomas
       stated in order to enable the transportation of the trucks, Central Illinois Trucks purchased
       approximately 30 gallons of fuel for each truck for a total of approximately 150 gallons of
       fuel. Three fuel receipts were attached to the affidavit, each showing the purchase of
       approximately 50 gallons of fuel. Further, the affidavit stated the trucks were equipped with
       sufficient fuel to drive from Springfield, Illinois, to Tennessee and, in particular, sufficient
       fuel to drive over the Illinois border to Paducah, Kentucky.
¶9          The hearing was held on November 13, 2008, in front of an administrative law judge
       (ALJ), who recommended affirming the issuance of the notices of tax liability. At the
       hearing, the Department argued plaintiff was required to have a single-trip permit affixed to
       each truck pursuant to section 13a.5 of the Tax Law. The Department also argued the single-
       trip permits were required because plaintiff met the definitions of “commercial motor
       vehicle” as set forth in section 1.16 of the Tax Law and “motor carrier” as defined in section
       1.17 of the Tax Law (35 ILCS 505/1.16, 1.17 (West 2006)).
¶ 10        Further, the Department argued the admission of the fuel receipts into evidence was
       insufficient to prove the fuel for all five trucks was purchased in Illinois because two of the
       trucks would have been fueled at two different pumps. In particular, the Department noted
       only three receipts were admitted into evidence for five trucks, each receipt indicated
       approximately 50 gallons of fuel had been purchased, and Central Illinois Trucks purchased
       approximately 30 gallons of fuel for each truck. Additionally, the Department noted the


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       vehicle identification numbers (VIN) written on the receipts matched the VINs of only two
       of the trucks in question. The Department argued these discrepancies undermined Thomas’s
       credibility.
¶ 11        In contrast, plaintiff argued the single-trip permits were not required because (1) section
       13a.5 of the Tax Law did not apply because the Illinois trucks were bought and fueled in
       Illinois, the retail tax for the fuel purchases was paid in Illinois, and the trucks exited Illinois;
       (2) plaintiff did not operate the trucks for a single trip through Illinois, or from a point on the
       border to a point within Illinois and then return to the border as required under section 13a.5
       of the Tax Law; and (3) plaintiff, as a dealer, fit into an exception established in the
       definition of “commercial motor vehicle” in section 1.16 of the Tax Law.
¶ 12        On March 30, 2009, the ALJ recommended affirming the issuance of the notices of tax
       liability but also recommended reducing three of the notices from $2,000 to $1,000 because
       the stops were all considered a first-time occurrence. The ALJ determined the trucks fell
       within the definition of “commercial motor vehicle” because the trucks were “motor vehicles
       that [were] used, designed or maintained for the transportation of persons or property, and
       they have [three] axles.”
¶ 13        The ALJ noted the definition of “commercial motor vehicle” included an exception for
       “commercial motor vehicles operated solely within [Illinois] for which all motor fuel is
       purchased within [Illinois].” However, the ALJ determined this exception did not apply to
       plaintiff’s trucks because the facts were undisputed plaintiff drove the trucks out of the State
       and to Tennessee. Also, the ALJ agreed with the Department and determined Thomas’s
       affidavit regarding the fuel purchase was implausible because one vehicle was not normally
       fueled at two different pumps.
¶ 14        Additionally, the ALJ determined plaintiff fell within the definition of “motor carrier.”
       The ALJ noted a “ ‘motor carrier’ [was] any person who operate[d] or causes to be operated
       any commercial motor vehicle on any highway in Illinois. 35 ILCS 505/13a.5 [(West
       2006)].” The ALJ determined plaintiff was a “motor carrier” because “it operated
       commercial motor vehicles in Illinois on the day in question.”
¶ 15        Further, the ALJ determined plaintiff was required to obtain single-trip permits under
       section 13a.5 of the Tax Law because the trucks fit within the definition for “commercial
       motor vehicle,” and plaintiff fit within the definition of “motor carrier.” The ALJ noted a
       single-trip permit authorized “operation of a commercial motor vehicle ‘for a single trip
       through the State of Illinois, or from a point on the border of this State to a point within and
       return to the border.’ [35 ILCS 505/13a.5 (West 2006)].” The ALJ stated the trucks were
       used for a single trip through Illinois because the trucks were picked up in Springfield,
       Illinois, and driven to Tennessee.
¶ 16        In April 2009, defendant, Brian A. Hamer, Director of defendant Department (Director),
       accepted the ALJ’s recommendation. In May 2009, plaintiff filed a complaint for
       administrative review. The circuit court heard arguments and in July 2010 affirmed the
       Director’s decision.
¶ 17        Specifically, the circuit court determined plaintiff’s trucks did fit within the exception
       established in the definition of “commercial motor vehicle” in section 1.16 of the Tax Law.

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       The court noted plaintiff’s argument regarding all the fuel being purchased in Illinois became
       moot as soon as the trucks exited Illinois.
¶ 18        Additionally, the circuit court noted a prior version of section 1.16 of the Tax Law (35
       ILCS 505/1.16 (West 1992)) included an exclusion in the “commercial motor vehicle”
       definition for “commercial motor vehicles owned by a manufacturer or dealer and held for
       sale, even though incidentally moved or operated on the highway.” According to the court,
       this version of the statute excluded Illinois dealers who “sold such vehicles to a buyer who
       is just moving them out of [Illinois].” Thus, the circuit court concluded the removal of this
       exception from the commercial-motor-vehicle definition showed the legislature intended “for
       this situation to require the single[-]trip permit.”
¶ 19        This appeal followed.

¶ 20                                        II. ANALYSIS
¶ 21        Plaintiff appeals, claiming the Department erred in the following respects: (1) it erred in
       its construction of section 13a.5 of the Tax Law because it concluded “a single trip through
       the State of Illinois” included trucks purchased and fueled in Illinois and then driven to
       Tennessee, and (2) it erred in not recognizing the exception established in the definition of
       “commercial motor vehicle” set forth in section 1.16 of the Tax Law. For the following
       reasons, we reverse the circuit court’s decision affirming the Department’s decision.

¶ 22                                   A. Standard of Review
¶ 23       Plaintiff argues the applicable standard of review is de novo because this case presents
       an issue of statutory construction, and no findings of fact were at issue. The Department
       argues this case does not present a pure question of law. Instead, it contends plaintiff’s
       arguments regarding the Department’s application of the statutory language to the facts raise
       mixed questions of law and fact and should be reviewed for clear error. The Department
       further contends plaintiff’s arguments regarding the meaning of section 1.16 of the Tax Law
       and the scope of the permits available under section 13a.5 of the Tax Law are issues of law
       and should be reviewed de novo.
¶ 24       On administrative review, the applicable standard of review is based on whether the case
       involves an issue of law, an issue of fact, or a mixed question of law and fact. Provena
       Covenant Medical Center v. Department of Revenue, 236 Ill. 2d 368, 386-87, 925 N.E.2d
       1131, 1143 (2010). When the case involves a question of law, the standard of review is de
       novo. Provena Covenant Medical Center, 236 Ill. 2d at 387, 925 N.E.2d at 1143.
¶ 25       However, when the case involves a question of fact, the reviewing court determines
       whether the findings of fact are against the manifest weight of the evidence. Cinkus v. Village
       of Stickney Municipal Officers Electoral Board, 228 Ill. 2d 200, 210, 886 N.E.2d 1011, 1018
       (2008). “An administrative agency’s factual determinations are against the manifest weight
       of the evidence if the opposite conclusion is clearly evident.” Cinkus, 228 Ill. 2d at 210, 886
       N.E.2d at 1018.
¶ 26       Additionally, a mixed question of law and fact involves a dispute as to whether the facts


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       of the case satisfy the applicable statutory requirements. Provena Covenant Medical Center,
       236 Ill. 2d at 387, 925 N.E.2d at 1143. When the case involves a mixed question of law and
       fact, the agency’s findings are reviewed for clear error. Provena Covenant Medical Center,
       236 Ill. 2d at 387, 925 N.E.2d at 1143. “An administrative decision will be set aside as
       clearly erroneous only when the reviewing court is left with the definite and firm conviction
       *** a mistake has been committed.” Provena Covenant Medical Center, 236 Ill. 2d at 387-
       88, 925 N.E.2d at 1143.
¶ 27       The determination of whether plaintiff was required to obtain single-trip permits to
       transport its trucks to Tennessee under section 13a.5 of the Tax Law and section 1.16 of the
       Tax Law is a matter of statutory construction. Therefore, the standard of review is de novo.

¶ 28                                     B. Single-Trip Permits
¶ 29        First, plaintiff argues the single-trip-permit requirement was not applicable to its trucks
       because the trucks were purchased in Illinois by an out-of-state resident, the trucks were
       fueled in Illinois, and the trucks were driven from the Illinois dealership, out of Illinois, and
       to plaintiff’s dealership in Tennessee. In particular, plaintiff argues the statutory language in
       section 13a.5 of the Tax Law requiring a commercial motor vehicle to purchase a single-trip
       permit “for a single trip through the State of Illinois” does not apply to trucks just exiting
       Illinois. Further, plaintiff argues its trucks were not required to have single-trip permits
       because the trucks did not fall within the definition of “commercial motor vehicle” set forth
       in section 1.16 of the Tax Law.
¶ 30        The primary goal of statutory construction is to “ascertain and give effect to the drafters’
       intention, and the most reliable indicator of intent is the language used, which must be given
       its plain and ordinary meaning.” People v. Smith, 236 Ill. 2d 162, 166-67, 923 N.E.2d 259,
       262 (2010).
¶ 31        Section 13a.4 of the Tax Law (35 ILCS 505/13a.4 (West 2006)) provides as follows:
                “Except as provided in Section 13a.5 of this Act, no motor carrier shall operate in
                Illinois without first securing a motor fuel use tax license and decals from the
                Department or a motor fuel use tax license and decals issued under the International
                Fuel Tax Agreement by any member jurisdiction.”
¶ 32        Additionally, section 13a.5 of the Tax Law (35 ILCS 505/13a.5 (West 2006)) states, in
       pertinent part, as follows:
                “As to a commercial motor vehicle operated in Illinois in the course of interstate
                traffic by a motor carrier not holding a motor fuel use tax license issued under this
                Act, a single trip permit authorizing operation of such commercial motor vehicle for
                a single trip through the State of Illinois, or from a point on the border of this State
                to a point within and return to the border may be issued by the Department or its
                agents after proper application.”
¶ 33        Section 1.16 of the Tax Law (35 ILCS 505/1.16 (West 2006)) defines “commercial motor
       vehicle” as follows:
                     “ ‘Commercial motor vehicle’ means a motor vehicle used, designed, or


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               maintained for the transportation of persons or property and either having 2 axles and
               a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds
               or 11,793 kilograms, or having 3 or more axles regardless of weight, or that is used
               in combination, when the weight of the combination exceeds 26,000 pounds or
               11,793 kilograms gross vehicle weight or registered gross vehicle weight, except for
               *** commercial motor vehicles operated solely within [Illinois] for which all motor
               fuel is purchased within [Illinois].” (Emphasis added.)
¶ 34       The Department argues plaintiff was required to acquire either a motor-fuel-use-tax
       license or single-trip permits prior to transporting its trucks from Illinois to Tennessee under
       sections 13a.4 and 13a.5 of the Tax Law. Additionally, the Department argues the trucks
       were not excluded from the definition of “commercial motor vehicle” because the trucks
       were not exclusively operated within Illinois. The Department further argues plaintiff’s
       argument regarding the fuel being purchased in Illinois is irrelevant. In contrast, plaintiff
       argues its trucks were not included within this definition of “commercial motor vehicle”
       because the trucks were stopped prior to exiting Illinois and the fuel for the trucks was
       purchased in Springfield, Illinois.
¶ 35       The definition of “commercial motor vehicle” excludes commercial motor vehicles
       operated solely within Illinois for which all motor fuel is purchased in Illinois. In the
       stipulation, the parties agreed the trucks “were exiting the State of Illinois from the location
       they had been acquired at to the location of Interstate Trucks in the State of Tennessee.”
       Although the trucks were being transported to Tennessee, the Department’s Bureau of
       Criminal Investigations stopped the trucks on Interstate 57 in Illinois. At the time of the stop,
       plaintiff’s agents had exclusively operated the trucks within the State of Illinois. Addition-
       ally, Thomas’s affidavit established sufficient fuel for the transportation of the trucks to the
       Kentucky border was purchased in Springfield, Illinois.
¶ 36       Consequently, plaintiff’s trucks did fit within the exception established in the definition
       of “commercial motor vehicle.” Because the trucks were not considered “commercial motor
       vehicles” under the plain language of section 1.16 of the Tax Law, plaintiff was not required
       to obtain single-trip permits for the transportation of the trucks to Tennessee.
¶ 37       Further, plaintiff was not required to obtain a motor-fuel-use-tax license because plaintiff
       did not fit within the definition of “motor carrier.” Section 1.17 of the Tax Law (35 ILCS
       505/1.17 (West 2006)) defines “motor carrier” as “any person who operates or causes to be
       operated any commercial motor vehicle on any highway within [Illinois].” Plaintiff’s trucks
       do not fit within this definition because the trucks are not considered “commercial motor
       vehicles” under section 1.16 of the Tax Law.
¶ 38       In Owner-Operator Independent Drivers Ass’n v. Bower, 325 Ill. App. 3d 1045, 1053,
       757 N.E.2d 627, 633 (2001), the court stated the purpose behind the motor-fuel-use tax is to
       “prevent out-of-state truckers who drive through Illinois from avoiding purchasing fuel and
       paying taxes in Illinois.” Consequently, out-of-state truckers are required to purchase either
       motor fuel in Illinois or pay outstanding fuel tax to their base state, which will then remit a
       portion of the tax to Illinois as reimbursement for the motor-fuel-use tax the trucker would
       have paid if the fuel was purchased in Illinois. Bower, 325 Ill. App. 3d at 1053, 757 N.E.2d


                                                 -7-
       at 633.
¶ 39        Requiring plaintiff to purchase single-trip permits in this case would not further the
       purpose behind the motor-fuel-use tax. Unlike Bower, this case does not involve an out-of-
       state resident seeking to avoid paying the motor-fuel-use tax by purchasing fuel outside
       Illinois and then using Illinois roads. Instead, this case involves an out-of-state dealership
       purchasing trucks in Illinois and then attempting to transport the trucks to its dealership in
       Tennessee. Plaintiff was not required to purchase single-trip permits as reimbursement to the
       State of Illinois for the motor-fuel-use tax because fuel for the trucks was purchased in
       Illinois, as evidenced by Thomas’s affidavit.
¶ 40        Consequently, single-trip permits authorizing operation of plaintiff’s trucks for a single
       trip through Illinois were not required because the trucks did not fit within the definition of
       “commercial motor vehicle.” Therefore, the circuit court’s decision affirming the Depart-
       ment’s decision is reversed.

¶ 41                                   III. CONCLUSION
¶ 42      For the reasons stated, we reverse the circuit court’s decision affirming the Department’s
       decision.
¶ 43      Reversed.




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