Illinois Supreme Court sides with Rolling Meadows in Cooper’s Hawk tax dispute with Arlington Heights
The Illinois Supreme Court on Thursday ruled in favor of Rolling Meadows in its three-year legal dispute with Arlington Heights over misallocated sales tax revenue from Cooper’s Hawk Winery & Restaurant on the towns’ border.
The decision prompted sharp words from Arlington Heights Mayor Thomas Hayes, who said Rolling Meadows, “should be ashamed of this unjust result.”
The restaurant, which opened in June 2011, at 798 W. Algonquin Road in Arlington Heights, mistakenly was coded as a Rolling Meadows business by the Illinois Department of Revenue. Upon discovering the error in March 2020, Arlington Heights recovered $109,000 — the maximum allowed by law — which covered the last six months of 2019.
In 2022, the village sued Rolling Meadows to recover the rest of the $1.1 million in sales tax revenue the restaurant generated between June 2011 and March 2020. A Cook County judge agreed with Rolling Meadows that the state’s revenue department has exclusive jurisdiction over such disputes and dismissed Arlington Heights’ claim.
Arlington Heights attorneys appealed and a state appellate court reversed the county court’s decision. Rolling Meadows’ appeal to the high court concluded with justices overturning the appellate decision and affirming the trial court’s ruling, finding “the IDOR has exclusive jurisdiction over tax matters, including misallocation disputes.”
“The sales tax misallocation here was an error that … only IDOR may correct,” the unanimous opinion reads.
The Supreme Court’s decision not only concludes the “unfortunate dispute” between neighbors, it clarifies “how sales tax misallocations are to be handled under existing state law and affirms that the City of Rolling Meadows followed the law as established by the Illinois legislature,” Rolling Meadows Mayor Lara Sanoica said Thursday in a prepared statement
“Arlington Heights and Rolling Meadows regularly work together to serve our residents who share the same schools and civic institutions,” said Sanoica, adding that the city will maintain its “positive working relationship with the Village of Arlington Heights to promote the overall well-being and prosperity of our shared community.”
The high court acknowledged it may appear unfair that Arlington Heights “was deprived of a decade of revenues from the Cooper’s Hawk located within its municipal boundaries.”
But the decision points out that both municipalities are required to review IDOR reports and had earlier opportunities to correct the restaurant location.
In a prepared statement, Hayes described the dispute as “a case of unjust enrichment and right versus wrong” and chided Rolling Meadows for a “persistent refusal to act fairly and responsibly.”
“It is wrong for Rolling Meadows to keep taxes, or for anyone to keep something they know does not belong to them,” he said, adding that the case sets a bad precedent for local governments throughout the state.