On Oct. 21, 2021, the Illinois Supreme Court ruled that Cook County’s firearm and ammunition taxes were unconstitutional because they violated the Uniformity Clause of the Illinois Constitution.1 Finding that the taxes directly interfered with the fundamental right to bear arms under the Second Amendment to the U.S. Constitution, the Court determined that the taxes were subject to a heightened level of scrutiny, requiring a substantial relationship between the tax classification and the object of the tax ordinance. Under this analysis, the Court concluded that the taxes violated uniformity because the revenue from the taxes was not directed at measures related to curbing the cost of gun violence or aimed at reducing gun violence.
In 2012, the Cook County Board of Commissioners enacted a $25 firearm tax imposed on the retail purchase of firearms within the county.2 The revenue generated from the tax is not directed to any specified fund or program. Subsequently in 2015, the Board enacted a tax on the retail purchase of firearm ammunition at the rate of $0.05 per cartridge for centerfire ammunition and $0.01 per cartridge for rimfire ammunition.3 The revenue generated from the ammunition tax is directed to the county’s public safety fund for operations related to public safety. Both taxes are imposed in addition to all other Cook County taxes.
The plaintiffs, Guns Save Life, Inc. and a Cook County resident, filed a lawsuit in state court challenging the taxes and seeking declaratory and injunctive relief. The plaintiffs alleged that the taxes violated both the Second Amendment to the U.S. Constitution and the Illinois Constitution, both concerning the right to bear arms. The plaintiffs also alleged that the taxes violated the Uniformity Clause of the Illinois Constitution because they singled out and taxed items related to a fundamental right.4 In response, the county argued that the taxes were justified because a reasonable relationship existed between the taxes and the economic and social costs of gun violence in the county.
Ruling on cross-motions for summary judgment, the trial court determined that the taxes did not infringe upon any federal or state constitutional right to bear arms because the county was exercising its home rule taxing powers and the taxes did not meaningfully impede the plaintiff’s ability to exercise their right to bear arms. The trial court also concluded that even if there was a constitutional violation, the taxes were nonetheless substantially related to the governmental interest of public safety because they directed revenue to specific programs designed to combat gun violence.
On appeal, the appellate court affirmed the trial court with respect to the county’s summary judgment motion, finding that the taxes did not restrict the plaintiffs’ ownership of firearms and ammunition. The court determined that the taxes were similar to other types of sales taxes imposed on the purchase of goods and services, and thus did not impose more than a marginal restraint on protected constitutional rights. Finally, the court affirmed the trial court’s ruling that the taxes did not violate uniformity, finding that the classifications were reasonably related to the objectives of the tax ordinances. The plaintiffs appealed the decision to the Illinois Supreme Court.
Supreme Court decision
Beginning with the plaintiffs’ Illinois constitutional claims, the Court agreed with the plaintiffs that the taxes violated uniformity. Applying to laws classifying the objects of non-property taxes or fees, the Illinois Uniformity Clause requires that “the classes be reasonable and the subjects and objects within each class . . . be taxed uniformly.”5 Citing to Illinois case law, the Court noted that a non-property tax classification generally survives scrutiny if it: (i) is based on a “real and substantial difference” between those taxed and not taxed; and (ii) bears “some reasonable relationship to the object of the legislation or to public policy.”6 The Court focused on the second prong of this inquiry as the plaintiffs abandoned their arguments under the first prong.
The Court acknowledged the county’s justification for the firearm and ammunition taxes was to fund the economic and social costs of gun violence in the county, pointing to evidence of rising numbers of patients with gunshot wounds in the county and the associated costs of treating each patient. However, the Court also recognized the “unique nature of the classification involved” in this case and agreed with the plaintiffs that the tax ordinances imposed a burden on the exercise of a fundamental right protected by the Second Amendment. Finding that the taxes did not directly burden a citizen’s right to use a firearm for self-defense, the Court determined that “they do directly burden a law-abiding citizen’s right to acquire a firearm and the necessary ammunition for self-defense.”
The Court next turned to analogous case law for guidance in analyzing a tax classification that bears on a fundamental right in the context of a uniformity challenge. The Court noted that it has applied different levels of scrutiny depending on the nature of the classification involved.7 However, the Court held that because that tax classification here directly bears on a fundamental right, “the government must establish a closer tie between the tax classification and the object of the legislation.” In other words, the tax classification must be “substantially related” to the object of the legislation.
While acknowledging the economic and social costs of gun violence on society, the Court noted that the revenue generated from the firearm tax was not directed to any fund or program specifically related to curbing the cost of gun violence. The Court found the same to be true for the ammunition tax, whose proceeds were not specifically directed to gun violence reduction initiatives. Therefore, the Court concluded that “the relationship between the tax classification and the use of the tax proceeds is not sufficiently tied” to the stated objective of reducing the costs of gun violence. Finding that both tax ordinances violated uniformity, the Court determined it was unnecessary to address the plaintiff’s federal constitutional challenges. Accordingly, the Court reversed the judgment of the appellate court and remanded the case for entry of summary judgment in favor of the plaintiffs.
In a concurring opinion, one justice wrote separately to caution that the majority opinion may be used by the county as guidance to enact a future tax on firearm or ammunition sales that is more narrowly tailored to the purpose of reducing gun violence. The concurrence found the majority’s approach problematic because any tax on firearms would still violate the provision of the Illinois Constitution stating that the individual right to bear arms “is subject only to the police power, not the power to tax.”8 For this reason, the concurrence stated that the majority was leading the county “down a road of futility” by allowing the county to enact a future tax that in the justice’s view would still be unconstitutional.
yMerely two weeks after the Court’s decision invalidating the firearm and ammunition taxes, Cook County approved an amended ordinance specifying that revenue from both taxes would be directed to a special purpose equity fund with the purpose of funding gun violence prevention programs in addition to operations and programs aimed at reducing gun violence.9 While the county is confident that the amended ordinance would rectify the Court’s concerns regarding a constitutional violation, the plaintiffs likely will object to the ordinance, alleging continued violations of the uniformity clause and the Second Amendment.10 If the amended ordinance is challenged once again in court, it will be interesting to see whether the Court will directly address the plaintiff’s Second Amendment claim, in addition to the state constitutional claim that the county is singling out the exercise of the right to bear arms for taxation, which was specifically highlighted in the concurrence.
As a case of first impression before the Court, the decision may apply more broadly to other taxes, based on the Court’s analysis of a tax classification that involves the interplay of the exercise of a fundamental right in the context of a uniformity clause challenge. The decision raises the question of whether other taxes singling out special objects of taxation and affecting a fundamental right will be subject to a heightened level of scrutiny in those states that have a uniformity clause.11 For example, recent lawsuits in Ohio and Maryland have alleged that city excise taxes imposed upon certain billboard operators in those cities violates the freedom of speech and freedom of the press protected under the First Amendment of the U.S. Constitution.12 While the Ohio Supreme Court and Maryland Court of Appeals came to different conclusions regarding whether a First Amendment violation existed, the Guns Save Life decision may present a potential alternative legal argument to similar plaintiffs alleging free speech violations.13
1 Guns Save Life, Inc. et al. v. Ali, Supreme Court of Illinois, No. 126014, Oct. 21, 2021.
2 Cook County Code of Ordinances, art. XX, § 74-668 (adopted Nov. 9, 2012).
3 Id. (effective June 1, 2016).
4 ILL. CONST. art. IX, § 2.
5 ILL. CONST. art. IX, § 2.
6 Citing Arangold Corp. v. Zehnder, 204 Ill. 2d 142 (2003).
7 For example, the Court found that imposition of a special tax upon the issuance of a marriage license directly impeded the fundamental right to marry and was thus subject to a heightened scrutiny standard. Boyton v. Kusper, 112 Ill. 2d 356 (1986). However, in the equal protection context, the Court has held that where a law does not involve a fundamental right, it need only satisfy the rational basis test, which requires merely a reasonable relationship between the tax and the object of the legislation. Jacobson v. Department of Public Aid, 171 Ill. 2d 314 (1996).
8 ILL. CONST. art. I, § 22.
9 Cook County Ordinance No. 21-6625, approved Nov. 4, 2021.
10 Michael J. Bologna, Illinois County’s Gun Tax Still Unconstitutional, Opponents Say, BLOOMBERG DAILY TAX REPORT: STATE, Nov. 8, 2021.
11 For example, Mid-Atlantic states such as Pennsylvania and Delaware have strictly interpreted tax uniformity principles in various areas of taxation, including corporate income tax, property taxes and gaming taxes.
12 See Lamar Advantage GP Co. LLC v. Cincinnati, Ohio Supreme Court, Slip Op. No. 2021-Ohio-3155, Sept. 16, 2021; Clear Channel Outdoor, Inc. v. Director, Baltimore Department of Finance, 472 Md. 444 (2021). For further discussion of the Ohio Supreme Court’s decision invalidating a Cincinnati billboard tax, see GT SALT Alert: Ohio ruling: Billboard tax violates First Amendment.
13 Although the Maryland Court of Appeals upheld a Baltimore billboard tax on the privilege of selling advertising space on billboards against similar First Amendment claims, the case has been appealed to the U.S. Supreme Court.
Jamie C. Yesnowitz
Jamie Yesnowitz, principal serving as the State and Local Tax (SALT) leader within Grant Thornton's Washington National Tax Office, is a national technical resource for Grant Thornton's SALT practice. He has 22 years of broad-based SALT consulting experience at the national and practice office levels in large public accounting firms.
Washington DC, Washington DC
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