We have been involved in numerous state and local tax cases. We represented the state of Illinois in the landmark Supreme Court case of Goldberg v. Sweet, 488 U.S. 252 (1989), which addresses, among other things, the constitutional validity of state taxes under the interstate commerce clause. Terry Moritz, the head of our Litigation Group, also represented Central Illinois Light Co. in the seminal case of Central Illinois Light Co. v. Johnson, 418 N.E.2d 696, (Ill. 1981), an original action in the Illinois Supreme Court regarding the proper classification for ad valorem tax purposes of property as either taxable real estate or non-taxable personalty.

In addition, we represented Commonwealth Edison in challenges regarding the classification of the property at its nuclear power plants as either real estate or personal property.  All of the machinery and equipment at certain of its plants, which comprised approximately 60 percent to 65 percent of their book value, was reclassified as real property for purposes of ad valorem real estate taxation. Because of adverse legal precedent, our client believed its chances for successfully challenging the reclassification of its property were slight. We were engaged to assist in developing and implementing a strategy to resolve this problem. We identified one nuclear generating station that would provide us with the best factual and procedural history to litigate the appropriateness of the tax treatment of the station machinery and equipment. We developed extensive engineering evidence concerning the makeup of a nuclear facility and compared, from an engineering perspective, the physical characteristics of the machinery and equipment in that facility to significantly smaller industrial facilities in rural Ogle County, where the station was located. The evidence showed that local officials were applying a different test to Commonwealth Edison than to other industrial facilities. After a three-month hearing, our client won a comprehensive victory, which was affirmed on appeal. The result of that victory ultimately led to successful settlements of related issues at virtually all of Commonwealth Edison's nuclear facilities and resulted in refunds and savings to the company that exceeded a quarter of a billion dollars on a present value basis.

Our experience extends to other cutting edge tax matters. For example, we currently represent Nextel West Corp. in several class action cases involving the taxation of commercial mobile radio service (more commonly referred to as cellular service).  In one of these cases, the putative plaintiff class consists of virtually every city in the state of Missouri. 

For more information on our State & Local Taxation Group experience, please contact Fred Cohen at 312.201.3929 or via e-mail at frederick.cohen@goldbergkohn.com.