Jenner & Block

Illinois Supreme Court Orders Tax Credits for Firm Client Exelon

Jenner & Block successfully represented Exelon Corporation, one of the nation’s largest electric utilities, before the Illinois Supreme Court in a long running dispute concerning millions of dollars in tax credits for the company stemming from its Illinois operations.

In 1995 and 1996, a predecessor company of Exelon bought nearly $3 billion of property in Illinois for the purposes of  generating, transmitting and distributing electricity to customers.  The company subsequently filed tax returns in which, pursuant to Illinois tax laws, it claimed millions of dollars in investment tax credits on the property, because it was being used in connection with the sale of “tangible consumer good or commodities.”

The Illinois Department of Revenue, relying on existing Illinois Supreme Court authority, denied the tax credit claims on the basis that electricity was not “tangible” as outlined in the tax code.  The company appealed, and the Illinois Appellate Court affirmed, again on the basis of existing Illinois Supreme Court precedent.

Jenner & Block petitioned for leave to appeal, and the Illinois Supreme Court took the appeal.  In its February 20, 2009 decision, the Supreme Court accepted the analysis in the Firm's brief distinguishing the prior Supreme Court case as dictum, and held that electricity is “tangible” property for the purposes of tax law.  The  Court directed the Department of Revenue to award Exelon the tax credits retroactively to 1995.

The Jenner & Block team on this matters was led by Partner Barry Levenstam and Benjamin K. Miller, Of Counsel, and assisted by Associate Amy D. Wills, former Associate Amy Trueblood, and paralegal Mary Frances Patston.