FIFTH DIVISION

MODIFIED ON DENIAL OF REHEARING

JUSTICE GREIMAN delivered the opinion of the court:

Plaintiff Exhibits, Inc., brought suit to recover taxes paid under protest pursuant to the State Officers and Employees Money Disposition Act (30 ILCS 230/1 et seq. (West 1996)) against defendants Roger Sweet, Director of Revenue, State of Illinois, and Jerome Consentino, Treasurer of the State of Illinois (collectively the Department).⁽¹⁾ The circuit court granted summary judgment to the Department. Exhibits now appeals.

^{For the reasons that follow, we affirm.}

^{Exhibits brought suit against the Department seeking a declaration that an assessment of tax liability imposed by the Department was unconstitutional. The tax was assessed pursuant to the Service Occupation Tax Act (Ill. Rev. Stat. 1987, ch. 120, par. 439.101 et seq.), which imposes a tax on persons engaged in the business of making sales of service. Although it is a tax on the service occupation, the tax is calculated at a percentage rate of the cost of tangible personal property transferred as an incident to the sale of service. Ill. Rev. Stat. 1987, ch. 120, par. 439.103.}

^{The parties stipulated to several essential facts. Exhibits is an Illinois corporation providing the services of designing and fabricating trade show exhibits, arranging for transportation of the exhibits to trade shows by common carrier, and assembling, maintaining, and disassembling the exhibits at the trade shows where the exhibits are used by their customers. Exhibits designs and fabricates the exhibits in Illinois. In the transactions in question, the exhibits were sold to Illinois customers and initially delivered to the customers at trade shows outside Illinois for use at those locations. Following disassembly of the exhibits at the end of the trade shows, the exhibits were returned to Illinois for storage and reuse.}

^{The Department conducted an audit of Exhibits' records for the period of July 1, 1986, to June 30, 1989. The auditors disallowed exemptions Exhibits claimed for transactions in which the customers were located in Illinois. The auditors concluded that these transactions were not within the protection of the federal commerce clause and Exhibits should be assessed pursuant to the Service Occupation Tax Act in the amount of $122,113.}

^{Exhibits denies that it is liable for any tax under that act and contends that the exemptions were legitimate because the exhibits were delivered and first used out of state, notwithstanding the subsequent storage in Illinois. Exhibits maintains that the commerce clause prohibits the taxation imposed. It admits that no foreign state has attempted to assess any sales, use, or similar tax on the transactions. Exhibits does not dispute the methodology used by the auditors to compute the tax deficiency.}

^{The parties specifically agreed:}

"As part of its sale of service with respect to each exhibit and transaction at issue, Exhibits arranged prior to the actual sale for:

^{(a) shipment out-of-state via common carrier for first use at an out-of-state trade show;}

^{(b) assembly and subsequent disassembly at the out-of-state trade show;}

^{(c) return shipment to Illinois via common carrier; [and]}

^{(d) storage in Illinois either at Exhibits' facility in Franklin Park, Illinois or some other location in Illinois. All exhibits from the transactions at issue were therefore stored in Illinois after delivery and first use at an out-of-state trade show ***."}

^{In all of the transactions at issue, Exhibits' customers were either headquartered in Illinois or did business in Illinois and had an Illinois address indicated on Exhibits' invoices. Exhibits' sales were usually "F.O.B. Our Plant."}

^{On July 25, 1997, the circuit court granted the Department's motion for summary judgment. The court entered judgment in favor of the Department on September 2, 1997. Plaintiff appealed from both orders and the matters were consolidated. The sole issue before this court is whether the collection of taxes on the transactions at issue pursuant to the Service Occupation Tax Act violates the commerce clause of the United States Constitution.}

^{Summary judgment is appropriate where the pleadings, depositions, and admissions, together with any affidavits, demonstrate that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2--1005(c) (West 1996). The standard of review is de novo. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (1992).}

^{Section 3 of the Service Occupation Tax Act provides:}

"A tax is imposed upon all persons engaged in the business of making sales of service (hereinafter referred to as servicemen) at the rate of 5% of the cost price of all tangible personal property *** transferred by said servicemen *** as an incident to a 'sale of service'. ***

^***

^{However, such tax is not imposed upon the privilege of engaging in any business in interstate commerce or otherwise, which business may not, under the Constitution and statutes of the United States, be made the subject of taxation by this State." Ill. Rev. Stat. 1987, ch. 120, par. 439.103.}

^{The Department contends that the taxation imposed does not violate the commerce clause. The Department relies on section 140.501(b) of the Illinois Administrative Code, which provides:}

"The serviceman does not incur Service Occupation Tax Liability on property which he resells as an incident to a sale of service under an agreement by which the serviceman is obligated to make physical delivery of the goods from a point in this State to a point outside this State, not to be returned to a point within this State, provided that such delivery is actually made. Nor does the tax apply to property which the serviceman resells as an incident to a sale of service under an agreement by which the serviceman, by carrier (when the carrier is not also the purchaser) or by mail, delivers the property from a point in this State to a point outside this State, not to be returned to a point within this State. The place at which title to the property passes to the purchaser is immaterial. The place at which the contract of sale of the service or contract to sell the service is negotiated and executed and the place at which the purchaser resides are also immaterial. Sales of service of the type described in this paragraph are deemed to be within the protection of the Commerce Clause of the Constitution of the United States." (Emphasis added.) 86 Ill. Adm. Code