Kean v. Wal-Mart Stores

SUPREME COURT CASES

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State: Illinois

Docket No: 107771 Rel

Case Date: 11/19/2009

Preview:Docket No. 107771.

IN THE SUPREME COURT OF THE STATE OF ILLINOIS

NANCY KEAN, Appellant (Chip Russell, Intervenor-Appellant), v. WAL-MART STORES, INC., et al., Appellees (Illinois Department of Revenue et al., Intervenors-Appellees). Opinion filed November 19, 2009.

CHIEF JUSTICE FITZGERALD delivered the judgment of the court, with opinion. Justices Thomas, Kilbride, Garman, Karmeier, and Burke concurred in the judgment and opinion. Justice Freeman took no part in the decision.

OPINION At issue in this appeal is whether shipping charges for certain internet purchases of tangible personal property are subject to Illinois sales tax pursuant to the Retailers' Occupation Tax Act (ROTA) (35 ILCS 120/1 et seq. (West 2006)) and Use Tax Act (35 ILCS 105/1 et seq. (West 2006)). We hold that they are and therefore affirm the judgment of the appellate court affirming the dismissal of plaintiffs' complaints. 387 Ill. App. 3d 262.

BACKGROUND On October 12, 2006, plaintiff Nancy Kean filed a putative multistate class action lawsuit in the circuit court of Cook County against defendants Wal-Mart Stores, Inc., Wal-Mart.com, U.S.A., LLC, and Wal-Mart Associates, Inc. (collectively, Wal-Mart). Kean alleged that on September 9, 2006, she purchased a trampoline through Wal-Mart's internet store at www.walmart.com. The price of the trampoline was $23.33, shipping charges were $7.97, and sales tax was $2.74, bringing Kean's order total to $34.04, which Kean paid on line with a credit card. Kean alleged that rather than assessing sales tax on the cost of the trampoline alone, Wal-Mart also assessed sales tax on the shipping charges. Citing ROTA (35 ILCS 120/1 et seq. (West 2006)) and the Use Tax Act (35 ILCS 105/1 et seq. (West 2006)), Kean contended that Wal-Mart's imposition of sales tax on shipping charges was without statutory authority. According to documents attached to the complaint, after completing her internet purchase, Kean communicated with Wal-Mart by e-mail regarding the sales tax. Kean advised Wal-Mart that she "recently checked with the State of Illinois, and was told that it is not legal to charge tax on shipping." In its e-mail reply, Wal-Mart stated that it was required by law to charge and collect the tax. Based on these allegations, Kean claimed, in count I, that WalMart violated the Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 2006)). Kean sought, inter alia, actual damages on behalf of herself and a class consisting of all consumers who purchased an item from Wal-Mart and were charged sales tax on the shipping of that item "when such consumer resided in a state where the imposition of sales tax on shipping services is prohibited." In count II, Kean claimed that, to the extent Wal-Mart does not remit the improperly collected taxes to the taxing authority, Wal-Mart has been unjustly enriched. Kean sought a disgorgement order on behalf of herself and the class. In count III, Kean sought injunctive relief

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