Tax News

CCH (cch.taxgroup.com) reports:

A wholly-owned subsidiary of an energy company was not entitled to a personal property tax replacement credit against Illinois corporate income tax for investments in qualified property because electricity did not qualify as tangible personal property.
The court noted that although it had previously recognized electricity as personal property, it had at no point held electricity to be tangible personal property. To include electricity within the classification of tangible personal property, for the purposes of the credit, would be inconsistent with Illinois precedent. Thus, the court was bound by stare decisis to adhere to the decisions of the Illinois Supreme Court and rule that electricity was not tangible personal property. The court also rejected the argument that the subsidiary qualified for the credit as a retailer upon finding that the subsidiary did not, as a matter of law, engage in "retailing."
The court also disallowed the subsidiary's contention that the credit statute violated the uniformity clause of the Illinois Constitution by allowing credits to gas companies, but not to electric companies. However, the uniformity clause merely required that a credit be "reasonable." Because the subsidiary did not claim the credit was unreasonable, but rather claimed that it was entitled to a credit, the subsidiary's argument was rejected.
Exelon Corp. v. Illinois Department of Revenue , Illinois Appellate Court, First District, No. 1-06-3388, September 24, 2007, ¶401-808
Other References:
Explanations at ¶12-055b