{ "id": 3778413, "name": "FOLLETT CORPORATION, Plaintiff-Appellant, v. THE DEPARTMENT OF REVENUE et al., Defendants-Appellees", "name_abbreviation": "Follett Corp. v. Department of Revenue", "decision_date": "2003-11-13", "docket_number": "No. 4-02-0938", "first_page": "388", "last_page": "400", "citations": [ { "type": "official", "cite": "344 Ill. App. 3d 388" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "442 N.E.2d 176", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1982, "pin_cites": [ { "page": "177" }, { "page": "178" } ], "opinion_index": 0 }, { "cite": "92 Ill. 2d 523", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3096946 ], "weight": 2, "year": 1982, "pin_cites": [ { "page": "526" }, { "page": "527" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/92/0523-01" ] }, { "cite": "369 N.E.2d 841", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1977, "opinion_index": 0 }, { "cite": "68 Ill. 2d 326", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5809967 ], "year": 1977, "opinion_index": 0, "case_paths": [ "/ill-2d/68/0326-01" ] }, { "cite": "417 N.E.2d 1343", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1981, "pin_cites": [ { "page": "1348" } ], "opinion_index": 0 }, { "cite": "84 Ill. 2d 102", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3046664 ], "year": 1981, "pin_cites": [ { "page": "109-10" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/84/0102-01" ] }, { "cite": "1984 Ill. Laws 1935", "category": "laws:leg_session", "reporter": "Ill. Laws", "opinion_index": 0 }, { "cite": "1984 Ill. Laws 1340", "category": "laws:leg_session", "reporter": "Ill. Laws", "weight": 2, "opinion_index": 0 }, { "cite": "1982 Ill. Laws 2946", "category": "laws:leg_session", "reporter": "Ill. Laws", "weight": 2, "opinion_index": 0 }, { "cite": "469 N.E.2d 200", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1984, "pin_cites": [ { "page": "203" } ], "opinion_index": 0 }, { "cite": "103 Ill. 2d 339", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3152113 ], "year": 1984, "pin_cites": [ { "page": "345" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/103/0339-01" ] }, { "cite": "445 N.E.2d 1174", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1983, "pin_cites": [ { "page": "1175" }, { "page": "1175" } ], "opinion_index": 0 }, { "cite": "94 Ill. 2d 138", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3106963 ], "weight": 2, "year": 1983, "pin_cites": [ { "page": "141" }, { "page": "141" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/94/0138-01" ] }, { "cite": "650 N.E.2d 1014", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1995, "pin_cites": [ { "page": "1023" } ], "opinion_index": 0 }, { "cite": "165 Ill. 2d 211", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 483550 ], "year": 1995, "pin_cites": [ { "page": "230" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/165/0211-01" ] }, { "cite": "469 N.E.2d 1067", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1984, "pin_cites": [ { "page": "1071" }, { "page": "1071" } ], "opinion_index": 0 }, { "cite": "103 Ill. 2d 363", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3152664 ], "weight": 2, "year": 1984, "pin_cites": [ { "page": "371-72" }, { "page": "371" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/103/0363-01" ] } ], "analysis": { "cardinality": 756, "char_count": 25335, "ocr_confidence": 0.75, "pagerank": { "raw": 7.168668855370785e-08, "percentile": 0.42931170890658105 }, "sha256": "c29251dbd90179348b4c282b09626671d315be3fd87deb064ef9f9b18bd75d1a", "simhash": "1:a32d8cd4e685a65f", "word_count": 4067 }, "last_updated": "2023-07-14T15:11:26.904766+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "FOLLETT CORPORATION, Plaintiff-Appellant, v. THE DEPARTMENT OF REVENUE et al., Defendants-Appellees." ], "opinions": [ { "text": "PRESIDING JUSTICE MYERSCOUGH\ndelivered the opinion of the court:\nIn October 1999, the Illinois Department of Revenue (Department) assessed plaintiff, Follett Corporation (Follett), a tax deficiency for tax years 1995, 1996, and 1997. The Department concluded that certain out-of-state sales made by plaintiff were subject to the sales \u201cthrow-back\u201d rule in the Illinois Income Tax Act (Income Tax Act) (35 ILCS 5/304(a)(3)(B)(ii) (West 2000)) and, therefore, should be considered as Follett\u2019s Illinois sales in determining Follett\u2019s tax liability. Follett paid the tax under protest and filed a complaint in the trial court under the State Officers and Employees Money Disposition Act (30 ILCS 230/1 through 6a (West 2000)) to challenge the Department\u2019s assessment. In its complaint, Follett named the Department, its Director, and the State Treasurer as defendants and sought injunctive and declaratory relief. Follett and the Department then moved for summary judgment on the question of whether the sales \u201cthrow-back\u201d rule applies to the sales at issue. In October 2002, the trial court granted summary judgment to the Department, concluding that the \u201cthrow-back\u201d rule applies to the sales in question. Follett appeals, arguing the \u201cthrow-back\u201d rule is not applicable. We affirm.\nI. BACKGROUND\nA. Factual Background\nFollett, an Illinois corporation, has its headquarters in River Grove, Illinois. Follett provides a wide variety of products and services to schools, educators, libraries, and federal agencies and institutions through its affiliates and divisions. Follett and some of its affiliates operate as a unitary business group (hereinafter Follett Group). From 1995 to 1997, Follett made sales of goods that were delivered to other states in which Follett itself was not subject to tax, but another member of the Follett Group, Follett College Stores Corporation (Fol-lett Stores), was taxed. Follett did not include these sales in its Illinois sales calculation, believing the Illinois sales \u201cthrow-back\u201d rule was not applicable to these sales.\nThe Department, after conducting audits of the tax returns provided by Follett and its affiliates, determined that Follett should have included these sales in its Illinois sales calculation. The Department assessed Follett total unpaid tax liability of $341,363 for the 1995, 1996, and 1997 tax years relating to the application of the sales \u201cthrow-back\u201d rule. The question before this court is whether the Department correctly applied the Illinois \u201cthrow-back\u201d rule in assessing Follett the $341,363 tax deficiency.\nB. Legal Background\n1. Unitary Business Group\nThe Income Tax Act defines the term \u201cunitary business group\u201d as \u201ca group of persons related through common ownership whose business activities are integrated with, dependent upon[,] and contribute to each other.\u201d 35 ILCS 5/1501(a)(27) (West 2000). Members of the group will not necessarily be subject to taxation by the same state or states.\nFor taxable years ending on or after December 31, 1993, section 502(e) of the Income Tax Act requires corporate members of the same unitary business group to be\n\u201ctreated as one taxpayer for purposes of any original return, amended return which includes the same taxpayers of the unitary group which joined in the election to file the original return, extension, claim for refund, assessment, collection and payment and determination of the group\u2019s tax liability under this Act.\u201d 35 ILCS 5/502(e) (West 2000).\nIn this case, Follett and some of its affiliates, including Follett Stores, constituted a \u201cunitary business group\u201d as the term is defined in section 1501(a)(27) of the Income Tax Act. 35 ILCS 5/1501(a)(27) (West 2000). The Follett Group filed combined tax returns for determination of the group\u2019s tax liability as required by section 502(e) of the Income Tax Act (35 ILCS 5/502(e) (West 2000)).\n2. Apportionment of a Taxpayer\u2019s Illinois Income\nSection 304(a) of the Income Tax Act states:\n\u201cIf a person other than a resident derives business income from this State and one or more other states, then, for tax years ending on or before December 30, 1998, and except as otherwise provided by this [sjection, such person\u2019s business income shall be apportioned to this State by multiplying the income by a fraction, the numerator of which is the sum of the property factor (if any), the payroll factor (if any)[,] and 200% of the sales factor (if any), and the denominator of which is 4 reduced by the number of factors other than the sales factor which have a denominator of zero and by an additional 2 if the sales factor has a denominator of zero.\u201d 35 ILCS 5/304(a) (West 2000).\nThe property factor, the payroll factor, and the sales factor are all fractions: the property factor compares the average value of the \u201cperson\u2019s\u201d property value in Illinois during the year to the value of its property everywhere; the payroll factor compares the amount of compensation the \u201cperson\u201d paid in Illinois during the year to the amount of compensation it paid everywhere; and the sales factor compares the \u201cperson\u2019s\u201d sales in Illinois during the year to its sales everywhere. 35 ILCS 5/304(a)(l) through (a)(3) (West 2000).\nThe parties maintain that this fraction formula can be as follows: expressed\nIf a taxpayer is a member of a unitary business group that conducts some of its business in Illinois, section 304(e) of the Income Tax Act requires the use of the combined-apportionment method to determine the amount of business income that is attributable to Illinois by such a taxpayer. 35 ILCS 5/304(e) (West 2000). The Income Tax Act itself does not define what is the combined-apportionment method. The Supreme Court of Illinois, however, prescribed how to apply the combined-apportionment method under section 304(a) to determine an individual corporation\u2019s share of the group\u2019s Illinois income-tax liability in General Telephone Co. of Illinois v. Johnson, 103 Ill. 2d 363, 371-72, 469 N.E.2d 1067, 1071 (1984), as follows:\n\u201cFirst, the business income of each corporate member of the group would be computed so that the total business income of the group could be derived. Then, to determine the apportionment factor for a group member subject to the Illinois income tax, the property, payroll, and sales factors would be computed by using the individual group member\u2019s Illinois property, payroll, and sales as numerators, and the entire unitary group\u2019s property, payroll, and sales as denominators. The average of these three factors would be the group member\u2019s apportionment factor. This apportionment factor then would be applied to the group\u2019s total business income to derive the amount of business income on which the group member would pay Illinois income tax.\u201d (Emphases in original.)\nFollett points out that the combined-apportionment factor formula can be expressed as follows:\nSee General Telephone Co., 103 Ill. 2d at 371, 469 N.E.2d at 1071.\n3. Illinois Sales and the Sales \u201cThrow-Back\u201d Rule\nSection 304(a)(3)(B) of the Income Tax Act provides as follows:\n\u201cSales of tangible personal property are in this State if:\n(i) The property is delivered or shipped to a purchaser, other than the United States government, within this State regardless of the f.o.b. point or other conditions of the sale; or\n(ii) The property is shipped from an office, store, warehouse, factoryt,] or other place of storage in this State and either the purchaser is the United States government or the person is not taxable in the state of the purchaser; provided, however, that premises owned or leased by a person who has independently contracted with the seller for the printing of newspapers, periodicals^] or books shall not be deemed to be an office, store, warehouse, factoryt,] or other place of storage for purposes of this [sjection. Sales of tangible personal property are not in this State if the seller and purchaser would be members of the same unitary business group but for the fact that either the seller or purchaser is a person with 80% or more of total business activity outside of the United States and the property is purchased for resale.\u201d 35 ILCS 5/304(a)(3)(B) (West 2000).\nThis second provision, subsection (ii), is known as the sales \u201cthrow-back\u201d rule because it treats certain out-of-state sales of a \u201cperson\u201d as Illinois sales for the purpose of calculating that \u201cperson\u2019s\u201d sales factor and its Illinois apportionment.\nC. The Dispute Between Follett and the Department\nFollett and the Department disagree on how the \u201cthrow-back\u201d rule should be applied, specifically, what is the meaning of the word \u201cperson\u201d in section 304(a)(3)(B)(ii) of the Income Tax Act (35 ILCS 5/304(a) (3)(B)(ii) (West 2000))?\nFollett argues, when applying the combined-apportionment method to determine an amount of business income on which a group member would pay Illinois income tax, the word \u201cperson\u201d in the \u201cthrow-back\u201d provision should mean the entire unitary business group. Therefore, even though Follett made sales to purchasers in the states where Follett itself was not subject to income tax, such sales should nevertheless not be \u201cthrown back\u201d to Illinois since another member of the Follett group, Follett Stores, was subject to income tax in those states.\nThe Department argues, and the trial court agreed, the word \u201cperson\u201d in the sales \u201cthrow-back\u201d rule does not refer to the entire unitary business group. Instead, the word \u201cperson\u201d refers to an individual corporate member in the group. Because Follett, as the \u201cperson,\u201d was not subject to tax in certain states, its sales to those states should be \u201cthrown back\u201d to Illinois in calculating its Illinois sales and its Illinois combined-apportionment factor.\nII. ANALYSIS\nA. Standard of Review\nThis appeal involves the construction and application of the Illinois sales \u201cthrow-back\u201d rule in the Income Tax Act (35 ILCS 5/304(a)(3)(B)(ii) (West 2000)). When no factual dispute is involved and the question on appeal is only the application of the law to the undisputed facts, the standard of review is de- novo. People v. Mitchell, 165 Ill. 2d 211, 230, 650 N.E.2d 1014, 1023 (1995).\nB. The Statutory Language in the Income Tax Act Supports the Department\u2019s Reading of the \u201cThrow-Back\u201d Statute\nThe Supreme Court of Illinois has stated in People v. Boykin, 94 Ill. 2d 138, 141, 445 N.E.2d 1174, 1175 (1983), to correctly construe and apply a statute, we must first ascertain and give effect to the intent of the legislature. In determining the legislative intent, courts should first consider the statutory language. Boykin, 94 Ill. 2d at 141, 445 N.E.2d at 1175. In addition, courts should give consideration to all the words of the provision, so that no word or clause is rendered meaningless or superfluous. People v. Singleton, 103 Ill. 2d 339, 345, 469 N.E.2d 200, 203 (1984).\n1. The Income Tax Act Defines the Term \u201cPerson \u201d as a \u201cCorporation,\u201d Not as a \u201cUnitary Business Group\u201d\nSection 1501(a)(18) of the Income Tax Act states: \u201cThe term \u2018person\u2019 shall be construed to mean and include an individual, a trust, estate, partnership, association, firm, company, corporation, limited liability company, or fiduciary.\u201d 35 ILCS 5/1501(a)(18) (West 2000). Such a definition requires us to interpret the term \u201cperson\u201d as each individual corporate member of a unitary business group, but this definition does not support Follett\u2019s argument that the term \u201cperson\u201d refers to the group itself.\n2. The Language in the \u201cThrow-Back\u201d Provision Indicates the Term \u201cPerson\u201d Refers to an Individual Corporation\nWe conclude the language in the last sentence of the sales \u201cthrow-back\u201d provision demonstrates the legislature\u2019s intent that, when a corporation is a member of a unitary business group, we must analyze each out-of-state sale at the individual corporate member\u2019s level to determine whether such a transaction is an Illinois sale. As a result, we should interpret the term \u201cperson\u201d as each individual corporation rather than the entire unitary business group.\nThe last sentence of the \u201cthrow-back\u201d provision states:\n\u201cSales of tangible personal property are not in this State if the seller and purchaser would be members of the same unitary business group but for the fact that either the seller or purchaser is a person with 80% or more of total business activity outside of the United States and the property is purchased for resale.\u201d 35 ILCS 5/304(a)(3)(B)(ii) (West 2000).\nIn 1982, the legislature added this sentence to the \u201cthrow-back\u201d statute to exclude from the apportionment calculation all sales by any member whose activities -are carried on primarily outside of the United States. Pub. Act 82 \u2014 1029, \u00a7 1, eff. December 15, 1982 (1982 Ill. Laws 2946, 2954). Thus, the Illinois legislature clearly regards the seller and purchaser of a sales transaction as individual corporations instead j of unitary business groups, since unitary business groups cannot be i \u201cmembers of the same unitary business group.\u201d Therefore, the above | sentence in the \u201cthrow-back\u201d provision governs an individual ! corporation\u2019s sale to another individual corporation, rather than a unitary business group\u2019s sale to a third-party purchaser.\nIf, as Follett argues, when a \u201cunitary business group\u201d is involved, | the word \u201cperson\u201d in the \u201cthrow-back\u201d provision refers to the entire group, then the sales \u201cthrow-back\u201d rule would govern the sales of the entire group to a third party. As demonstrated above, such a reading does not give effect to the language set forth in the last sentence, and it conflicts with the legislature\u2019s intent.\n3. The Statutory Language in Other Provisions of the Income Tax Act Also Indicates the Word \u201cPerson \u201d Refers to an Individual Corporation\nIn addition to the \u201cthrow-back\u201d statute itself, language in other provisions of the Income Tax Act also supports reading the term \u201cperson\u201d as an individual corporation rather than as a unitary business group.\nThe Income Tax Act defines a \u201cunitary business group\u201d as \u201ca group of persons\u201d who are \u201crelated through common ownership\u201d and \u201cwhose business activities are integrated with, dependent upon[,] and contribute to each other.\u201d 35 ILCS 5/1501(a)(27) (West 2000). Therefore, the statute specifies that each individual corporate member of a unitary business group is a \u201cperson,\u201d but the group itself is not.\nSection 304(e) of the Income Tax Act requires the use of the combined-apportionment method, when \u201c2 or more persons\u201d are engaged in a unitary business, a part of which is conducted in Illinois. 35 ILCS 5/304(e) (West 2000). The language in this provision also indicates the Illinois legislature\u2019s intent that the term \u201cperson\u201d refers to each individual member of a unitary business group.\nFollett argues section 502(e) of the Income Tax Act supports its reading of the term \u201cperson\u201d in the \u201cthrow-back\u201d statute as a unitary business group. 35 ILCS 5/502(e) (West 2000). Section 502(e) states:\n\u201cFor taxable years ending on or after December 31, 1993, taxpayers that are corporations (other than Subchapter S corporations) and that are members of the same unitary business group shall be treated as one taxpayer for purposes of any original return, amended return which includes the same taxpayers of the unitary group which joined in filing the original return, extension, claim for refund, assessment, collection and payment and determination of the group\u2019s tax liability under this Act.\u201d 35 ILCS 5/502(e) (West 2000).\nFollett states that, because the Income Tax Act defines the term \u201ctaxpayer\u201d as \u201cany person subject to the tax imposed by this Act\u201d (35 ILCS 5/1501(a)(24) (West 2000)), the above section can be construed to read as follows:\n\u201cPersons who are subject to the tax imposed by this Act that are corporations (other than Subchapter S corporations) and that are members of the same unitary business group shall be treated as one person that is subject to the tax imposed by this Act for purposes of any original return, amended return which includes the same taxpayers of the unitary business group which joined in filing the original return, extension, claim for refund, assessment, collection and payment and determination of the group\u2019s tax liability under this Act.\u201d (Emphases added.)\nBecause Follett and Follett Stores are both \u201cpersons who are subject to the tax imposed by this Act,\u201d Follett suggests section 503(e) operates to treat Follett and Follett Stores as \u201cone person subject to the tax imposed by this Act.\u201d Follett thus concludes that the sales \u201cthrow-back\u201d rule is inapplicable to the sales in question since Follett and Follett Stores, as \u201cone person subject to the income tax,\u201d is taxable in each of the sales states. We disagree.\nAlthough section 503(e) of the Income Tax Act states that members of a unitary business group should be treated as \u201cone taxpayer,\u201d such a treatment is only for the purpose of determining \u201cthe group\u2019s tax liability under this Act.\u201d (Emphasis added.) 35 ILCS 5/502(e) (West 2000). It does not apply to a situation where an individual corporate member\u2019s Illinois income-tax liability is in question. Therefore, even if we accept Follett\u2019s suggestion that the definition of the term \u201ctaxpayer\u201d allows section 503(e) to treat several members of a unitary business group as \u201cone person subject to the income tax\u201d for section 503(e) purposes, such an operation should not apply to the calculation of an individual member\u2019s apportionment factor or its individual Illinois sales.\nA study of the legislative history further verifies that the Illinois legislature intended for section 502(e) to govern only the determination of a unitary business group\u2019s group tax liability. In 1984, the General Assembly passed a law embodying what ultimately became section 502(e). Pub. Act 83 \u2014 1289, \u00a7 1, eff. August 31, 1984 (1984 Ill. Laws 1340, 1342). That law was basically the same as the current provision, except instead of the phrase \u201cdetermination of the group\u2019s liability,\u201d the language in that first law was \u201cpayment of the sum of what would be their separate tax liabilities.\u201d Pub. Act 83 \u2014 1289, \u00a7 1, eff. August 31, 1984 (1984 Ill. Laws 1340, 1342). Before the first law went into effect, the General Assembly passed a second law that included the phrase \u201cdetermination of the group\u2019s tax liability\u201d superseding it. Pub. Act 84 \u2014 221, art I., \u00a7 4, eff. September 1, 1985 (1984 Ill. Laws 1935, 1942). This change of language strongly indicates the legislature\u2019s determination that section 502(e) does not apply to an individual corporate member\u2019s own separate Illinois income-tax liability.\nC. Reading the Term \u201cPerson\u201d as an Individual Corporation Is Also Consistent with the Illinois Supreme Court\u2019s Decisions\nAs discussed above, although the Income Tax Act itself does not define the \u201ccombined-apportionment method,\u201d the Illinois Supreme Court has determined how the combined-apportionment method should be applied under section 304(a). General Telephone Co., 103 Ill. 2d at 371, 469 N.E.2d at 1071. The supreme court stated, in deciding the separate tax liability of a member of a unitary group, the sales factor consists of a denominator, which is the entire group\u2019s nationwide sales, and a numerator, which is that individual member\u2019s Illinois sales.\nIn this case, the question before this court is whether the sales \u201cthrow-back\u201d statute applies to Follett\u2019s individual out-of-state sales, or in other words, what is the correct numerator of Follett\u2019s sales factor? The combined-apportionment formula prescribed by the Illinois Supreme Court requires that, in calculating a corporate member\u2019s Illinois sales factor, the numerator be that individual corporation\u2019s sales, not the entire unitary business group\u2019s sales. Therefore, to correctly determine Follett\u2019s individual Illinois sales, we must construe the term \u201cperson\u201d in the sales \u201cthrow-back\u201d provision as Follett, not the Follett Group.\nWe do recognize, however, an inconsistency between the statutory language and the combined-apportionment formula. Section 304(a)(3)(A) of the Income Tax Act states, in calculating the apportionment factor: \u201c[t]he sales factor is a fraction, the numerator of which is the total sales of the person in this State during the taxable year, and the denominator of which is the total sales of the person everywhere during the taxable year.\u201d (Emphases added.) 35 ILCS 5/304(a)(3)(A) (West 2000). The Income Tax Act contains its own construction rule, however, which states as follows: \u201cAny term used in any [s]ection of this Act with respect to the application of, or in connection with, the provisions of any other [sjection of this Act shall have the same meaning as in such other [s]ection.\u201d 35 ILCS 5/1501(b)(3) (West 2000). Therefore, the Income Tax Act requires the term \u201cperson\u201d to have the same meaning in arriving at both the denominator and the numerator of the sales factor. The \u201ccombined-apportionment\u201d formula as prescribed by the Illinois Supreme Court is inconsistent with this section 1501(b)(3) requirement, because it uses a unitary business group\u2019s total sales as the denominator and an individual corporation\u2019s sales as the numerator for the calculation of the sales factor.\nNevertheless, we conclude the inconsistency does not invalidate the combined-apportionment formula. This is because the legislative history indicates that, in approving section 304(e) of the Income Tax Act (35 ILCS 5/304(e) (West 2000)), the Illinois legislature accepted the Illinois Supreme Court\u2019s \u201ccombined-apportionment\u201d formula. In 1981, the Illinois Supreme Court ruled the Income Tax Act approves the use of the combined-apportionment formula for application to the combined worldwide income of Caterpillar Tractor Company and its 25 subsidiaries, allowing each corporation to compare its individual Illinois data with the combined worldwide total of the entire unitary group. Caterpillar Tractor Co. v. Lenckos, 84 Ill. 2d 102, 109-10, 417 N.E.2d 1343, 1348 (1981). In 1982, the General Assembly passed an amendment that added section 304(e) to the Income Tax Act to require combined apportionment for taxpayers who, by statutory definition, are unitary business group members. Pub. Act. 82\u2014 1029, \u00a7 1, eff. December 15, 1982 (1982 Ill. Laws 2946, 2953). The legislature debated the merit of the worldwide combined-apportionment method as approved by the Illinois Supreme Court before adopting a domestic version that excludes from the unitary business group any member whose activities are carried on primarily outside of the United States. 82d Ill. Gen. Assem., House Proceedings, May 19, 1982, at 67-95; May 21, 1982, at 89-100; 82d Ill. Gen. Assem., Senate Proceedings, June 21, 1982, at 35-50; June 24, 1982, at 127-31, 133-50; December 2, 1982, at 30-34. The Illinois Supreme Court then acknowledged this legislative modification in General Telephone Co., stating instead of the worldwide total, the domestic total of the unitary group should be used as the denominator. General Telephone Co., 103 Ill. 2d at 372-73, 469 N.E.2d at 1072. Therefore, the legislature specifically authorized the application of the combined-apportionment formula as prescribed by the Illinois Supreme Court, despite the inconsistency with the statutory language of section 304(a)(3) (35 ILCS 5/304(a)(3) (West 2000)).\nD. Follett\u2019s Tax-Policy Arguments\nFollett argues the Department\u2019s reading and application of the sales \u201cthrow-back\u201d statute is based on a patent misconception of the apportionment laws initiated by the Illinois Supreme Court in GTE Automatic Electric, Inc. v. Allphin, 68 Ill. 2d 326, 369 N.E.2d 841 (1977). Follett insists that the combined-apportionment method and the modern unitary business theory \u201ccompel the conclusion that a unitary business group is one \u2018person\u2019 under the Income Tax Act\u2019s apportionment regime.\u201d Follett also argues the Department\u2019s reading would encourage corporate shell games since Follett could make Fol-lett Stores a wholly owned division to qualify as one \u201cperson\u201d that is taxable in every sales state and avoid the application of the sales \u201cthrow-back\u201d statute.\nThe Illinois Supreme Court has stated that it is not for courts to amend or change the law under guise of construction. Koeppel v. Ives, 92 Ill. 2d 523, 526, 442 N.E.2d 176, 177 (1982). In addition, \u201c[t]he courts especially should avoid unnecessary interference with the system of taxation established by the legislature.\u201d Koeppel, 92 Ill. 2d at 527, 442 N.E.2d at 178.\nWe have determined that the Department\u2019s reading reflects the Illinois legislature\u2019s intent, and it is consistent with both the statutory language in the Income Tax Act and the Illinois Supreme Court\u2019s decisions. Therefore, we need not address Follett\u2019s tax-policy arguments.\nIII. CONCLUSION\nFor the reasons set forth above, we affirm the trial court.\nAffirmed.\nTURNER and McCULLOUGH, JJ., concur.", "type": "majority", "author": "PRESIDING JUSTICE MYERSCOUGH" } ], "attorneys": [ "Marilyn A. Wethekam and Brian L. Browdy (argued), both of Horwood, Marcus & Berk, Chtrd., of Chicago, and Joseph E. McMenamin, of Dunn & McMenamin, of Springfield, for appellant.", "Lisa Madigan, Attorney General, of Chicago (Gary S. Feinerman, Solicitor General, and Laura M. Wunder (argued), Assistant Attorney General, of counsel), for appellees." ], "corrections": "", "head_matter": "FOLLETT CORPORATION, Plaintiff-Appellant, v. THE DEPARTMENT OF REVENUE et al., Defendants-Appellees.\nFourth District\nNo. 4-02-0938\nArgued October 15, 2003.\nOpinion filed November 13, 2003.\nMarilyn A. Wethekam and Brian L. Browdy (argued), both of Horwood, Marcus & Berk, Chtrd., of Chicago, and Joseph E. McMenamin, of Dunn & McMenamin, of Springfield, for appellant.\nLisa Madigan, Attorney General, of Chicago (Gary S. Feinerman, Solicitor General, and Laura M. Wunder (argued), Assistant Attorney General, of counsel), for appellees." }, "file_name": "0388-01", "first_page_order": 406, "last_page_order": 418 }