Does the Metropolitan Pier and Exposition Authority (MPEA) food and beverage tax apply to food, alcohol, and soft drinks sold on tour boats that depart from and return to docks on the Chicago River?

Plain-English summary

A company that runs public tour boats departing from and returning to its own docks on the main branch of the Chicago River asked the Illinois Department of Revenue for a private letter ruling (PLR) confirming that it did not owe the Metropolitan Pier and Exposition Authority (MPEA) food and beverage tax on the pre-packaged food, alcoholic beverages, and soft drinks it sold onboard. The company had already received a Notice Before Collection Action from the Department demanding MPEA tax and ST-4 returns for past periods, and it argued that a specific statutory provision limiting the tax to boats departing from and returning to the shoreline of Lake Michigan (including Navy Pier) meant that boats using only Chicago River docks fell outside the tax entirely.

The Department declined to issue the requested PLR — that decision is discretionary under 2 Ill. Adm. Code 1200.110(a)(4) — and instead issued this General Information Letter (GIL). On the merits, the Department disagreed with the company's reading of the statute. The MPEA Act's general boundary description already includes the portion of the Chicago River where the company's docks sit. The separate clause about watercraft "departing from and returning to the shoreline of Lake Michigan" was not written to narrow the tax to only that subset of boats; instead, the Department explained, it exists to remove any doubt about taxing boats that go out onto Lake Michigan itself, since the lake is not part of the land-based MPEA territory. That clause has no bearing on boats that never leave MPEA territory in the first place.

Because the company's docks and the portion of the Chicago River its tours use are squarely within the MPEA boundaries drawn under 70 ILCS 210/13(b), the Department concluded that food, alcoholic beverages, and soft drinks sold on those tour boats are subject to the MPEA Retailers' Occupation Tax — whether a given cruise stays entirely on the river or also goes out onto Lake Michigan.

What this means for you

Tour and charter boat operators in the Chicago area

If your boat docks, departs from, and returns to a location within the MPEA boundaries (which include the relevant stretch of the Chicago River as well as the Lake Michigan shoreline, Navy Pier, and other fixed improvements), the Department's position is that MPEA tax applies to your onboard food, alcohol, and soft drink sales, even if you never touch Lake Michigan. Only boats that depart from and return to points outside those boundaries would fall outside the tax under this reasoning.

Business owners and accountants

Note that this is a GIL, not the PLR the taxpayer originally requested. The Department can and does decline PLR requests at its discretion; when it does, a GIL explaining its general view is not binding on the Department the way a PLR would be. If you are in a similar situation and need a ruling you can rely on, you would need to submit your own PLR request under 2 Ill. Adm. Code 1200.110 with your specific facts.

Tax professionals

The core interpretive dispute here is whether a specific statutory clause (watercraft departing from/returning to the Lake Michigan shoreline) narrows a more general grant of taxing authority (the MPEA boundaries as a whole). The taxpayer invoked the canon that specific provisions control over general ones and that tax statutes are construed against the taxing authority. The Department's counter-view was that the Lake Michigan clause serves a different, narrower purpose — extending the tax to reach boats that leave land-based MPEA territory — and does not limit or displace the tax on sales made by boats that never leave that territory.

Common questions

Q: Did the Department give the company the ruling it asked for?
A: No. The company requested a private letter ruling (PLR), but the Department exercised its discretion under 2 Ill. Adm. Code 1200.110(a)(4) to decline and issued this non-binding GIL instead.

Q: Does the MPEA tax only apply to boats that go out onto Lake Michigan?
A: No. The Department concluded that boats whose docks and routes are within the MPEA's land-based boundaries (which include part of the Chicago River) are subject to the tax regardless of whether they also enter Lake Michigan. The Lake Michigan departure/return language addresses a separate situation: extending the tax to reach boats that leave MPEA territory to sail on the lake.

Q: What if a boat's dock is genuinely outside the MPEA boundaries and it never enters the described Chicago River or Lake Michigan area?
A: This GIL does not address that scenario; it applies specifically to a boat operator whose docks and routes were, on the facts presented, within the boundaries described in 70 ILCS 210/13(b).

Q: Can this taxpayer rely on this GIL if the Department later audits it again?
A: No. A GIL is expressly not a statement of Department policy and is not binding on the Department, unlike a PLR. It only explains the Department's general reasoning in response to the inquiry.

Citations and references

• 70 ILCS 210/13(a) (MPEA has no taxing power except as specifically provided in the Act)
• 70 ILCS 210/13(b) (MPEA Retailers' Occupation Tax on food, alcoholic beverages, and soft drinks; territorial boundaries; boat/watercraft clause)
• 2 Ill. Adm. Code 1200.110(a)(4) (Department's discretion to decline to issue a requested private letter ruling)
• 2 Ill. Adm. Code 1200.120 (General Information Letters are not statements of Department policy and are not binding on the Department)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2018.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2018/st-18-0017-gil.pdf

Original ruling text

ST 18-0017-GIL 05/07/2018 MISCELLANEOUS
This letter discusses the application of Metropolitan Pier and Exposition Authority Retailers’
Occupation Tax to sales of food, alcoholic beverages, and soft drinks sold on boats and other
watercraft. See 70 ILCS 210/13. (This is a GIL.)

May 7, 2018

Re:

COMPANY – Request for Private Letter Ruling

Dear Xxxxx:
This letter is in response to your letter dated August 16, 2017 in which you requested
information. The Department issues two types of letter rulings. Private Letter Rulings (“PLRs”) are
issued by the Department in response to specific taxpayer inquiries concerning the application of a
tax statute or rule to a particular fact situation. A PLR is binding on the Department, but only as to the
taxpayer who is the subject of the request for ruling and only to the extent the facts recited in the PLR
are correct and complete. Persons seeking PLRs must comply with the procedures for PLRs found in
the Department’s regulations at 2 Ill. Adm. Code 1200.110. The purpose of a General Information
Letter (“GIL”) is to direct taxpayers to Department regulations or other sources of information
regarding the topic about which they have inquired. A GIL is not a statement of Department policy
and is not binding on the Department. See 2 Ill. Adm. Code 1200.120. You may access our website
at www.tax.illinois.gov to review regulations, letter rulings and other types of information relevant to
your inquiry.
The nature of your inquiry and the information you have provided require that we respond with
a GIL. In your letter you have stated and made inquiry as follows:
I am writing this letter to respectfully request a private letter ruling, pursuant to Illinois
Administrative Code §1200.110, as to whether my client, COMPANY (“COMPANY”), is
responsible for paying the Metropolitan Pier and Exposition Authority Food and
Beverage Tax (the “MPEA Tax”) for sales of food, alcoholic beverages and soft drinks
sold on COMPANY’s tour boats that depart from and return to COMPANY’s docks on
the Chicago River.
A Power of Attorney authorizing my representation of COMPANY is enclosed.

Statement of Material Facts
COMPANY is an Illinois corporation with an office located at ADDRESS, CITY, Illinois.
COMPANY provides public boat tours which depart from and return to its docks on the
main branch of the Chicago River. Some of COMPANY’s tours take place entirely on

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the Chicago River, while other tours go into Lake Michigan. COMPANY’s passengers
may purchase pre-packaged food and beverages, including soda and alcoholic
beverages, for consumption while on a COMPANY tour.
COMPANY does not have any docks on the shoreline of Lake Michigan, including Navy
Pier, and none of its boats depart from, return to, or stop at any point on Navy Pier or
the shoreline of Lake Michigan.
COMPANY received a Notice Before Collection Action from the Department, dated
MONTH XX, XXXX, stating that COMPANY is required to file monthly ST-4 returns and
pay the MPEA Tax for the period from MONTH XXXX – MONTH XXXX. A true and
correct copy of this Notice is attached as Exhibit A.
Contracts, Licenses, Agreements
There are no contracts, licenses or agreements that are relevant to this request.
COMPANY does not own, lease, license or otherwise have any agreement relating to
the possession or use of any dock on Navy Pier or any other improvements, docks or
piers on the shoreline of Lake Michigan.
Tax Periods At Issue / No Pending Matters or Prior Rulings
This PLR request relates to all prior MPEA Tax periods including all prospective periods
(the “Periods at Issue”).
To the best of COMPANY’s and my knowledge, 1) there is no audit or litigation pending
with the Department regarding COMPANY’s or a related taxpayer’s MPEA Tax liability
for the Periods at Issue, and 2) the Department has not previously ruled on the same or
a similar issue for COMPANY or a predecessor of COMPANY.
Statement of Authorities and Analysis
The MPEA Tax is a retailers’ occupation tax of 1% on the gross receipts from food
prepared for immediate consumption, alcoholic beverages and soft drinks. 70 ILCS
210/13 (the “MPEA Tax Act”). Section 13(b) of the MPEA Tax Act generally describes
the Metropolitan Pier and Exposition Authority boundaries.
In addition to establishing the boundaries, Section 13(b) of the MPEA Tax Act
specifically addresses the application of the MPEA Tax to sales of food and beverages
that occur on boats, rather that sales that occur on land, and reads as follows:
“The tax authorized to be levied under this subsection (b) may also be
levied on food, alcoholic beverages and soft drinks sold on boats and
other watercraft departing from and returning to the shoreline of Lake
Michigan (including Navy Pier and all other improvements fixed to land,

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docks or piers) [between the Stevenson Expressway to Diversey
Avenue].” [emphasis added]
It is a maxim of statutory construction that specific provisions of a statute control over
general provisions, where the general terms may otherwise be controlling. See, e.g.,
Kepner v. United States, 195 U.S. 100, 125 (1904); U.S. V Kuecker, 740 F.2d 496, 502
(7th Cir. 1984). Specific provisions targeting a particular issue apply instead of
provisions more generally covering the issue. Crawford Fitting Co. v. J.T. Gibbons, Inc.,
482 U.S. 437, 444-45 (1987) (holding that absent explicit statutory or contractual
authorization for the taxation of the expense of litigant’s witness as costs, federal courts
are bound by the limitations set out in 28 U.S.C. 1821 and 1920). General language of
a statute, although broad enough to include it, will not be held to apply to a matter
specifically dealt with in another part of the same statute. D. Ginsberg & Sons, Inc. v.
Popkin, 285 U.S. 204 (1932).
MPEA does not have the power to levy taxes for any purpose, except as specifically
provide in the MPEA Tax Act. 70 ILCS 210/13(a). By including the quoted paragraph at
the end of Section 13(b), the legislature specifically addressed sales taking place on
boats, and limited the application of the MPEA Tax to sales on boats both departing
from and returning to docks on the shoreline of Lake Michigan, including Navy Pier. As
noted, COMPANY’s tour boats do not depart from or return to Navy Pier or any other
improvements, docks or piers on the shoreline of Lake Michigan.
Tax ordinances are construed against the taxing authority. When a statute is clear and
unambiguous on its face, there is no need to look at the legislative history of the statue
for interpretation. EEOC v. Chicago Housing Authority, 725 F. Supp. 392, 393 (7th Cir.
1989). A tax law, in particular, is construed strictly. Kankakee County Bd. of Review v.
Property Tax Appeal Bd., 226 Ill. 2d 36, 52 (2007). A tax statute must be strictly
construed against the government and in favor of the taxpayer. Chi. Bears Football
Club v. Cook County Dep’t of Revenue, 2014 IL App. (1st) 122892 ¶26. If there is any
doubt about the meaning of a tax law or its reach, then the law is strictly construed
against the taxing body and in favor of the taxpayer or tax collector. Kankakee County
Bd. of Review, 226 Ill.2d at 52.
Food and beverage sales on COMPANY’s boats should be excluded from the MPEA
Tax under the specific provision addressing sales on boats. Any contrary construction
would violate the cardinal rule to give effect to every part of the ordinance. Accordingly,
it is COMPANY’s view that the MPEA Tax does not apply to sales of food, alcoholic
beverages and soft drinks sold on COMPANY’s tour boats, and the MPEA Tax may not
be levied on such sales.
We have researched this issue and are unable to locate any authorities contrary to
COMPANY’s views as set forth in this letter.
Trade Secret Information

ST 18-0017-GIL
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There is no specific trade secret information in this letter that must be redacted prior to
public dissemination.
Ruling Requested
COMPANY requests that the Department issue a private letter ruling confirming that the
MPEA Tax does not apply to sales of food and beverages sold on COMPANY’s tour
boats that depart from and return to COMPANY’s docks on the Chicago River.
We look forward to the Department’s response. If you have any questions, please feel
free to contact me.
DEPARTMENT’S RESPONSE:
The Department’s regulation “Public Information, Rulemaking and Organization” provides that
“[w]hether to issue a private letter ruling in response to a letter ruling request is within the discretion of
the Department. The Department will respond to all requests for private letter rulings either by
issuance of a ruling or by a letter explaining that the request for ruling will not be honored.” 2 Ill. Adm.
Code 1200.110(a)(4). The Department recently met and determined that it would decline to issue a
Private Letter Ruling in response to your request. We hope, however, the following General
Information Letter will be helpful in addressing your questions.
The Metropolitan Pier and Exposition Authority Act (“Act) requires the Metropolitan Pier and
Exposition Authority to impose a Metropolitan Pier and Exposition Authority Retailers’ Occupation Tax
upon all persons engaged in the business of selling tangible personal property at retail at the rate of
1.0% of the gross receipts (i) from the sale of food, alcoholic beverages, and soft drinks sold for
consumption on the premises where sold and (ii) from the sale of food, alcoholic beverages, and soft
drinks sold for consumption off the premises where sold by a retailer whose principal source of gross
receipts is from the sale of food, alcoholic beverages, and soft drinks prepared for immediate
consumption within the territory described in the Act. 70 ILCS 210/13(b). The boundaries of the
Metropolitan Pier and Exposition Authority are described in subsection (b) of Section 13.
“The tax authorized to be levied under this subsection may be levied within all or any
part of the following described portions of the metropolitan area:
1) that portion of the City of Chicago located within the following area:
Beginning at the point of intersection of the Cook County - DuPage County line and
York Road, then North along York Road to its intersection with Touhy Avenue, then east
along Touhy Avenue to its intersection with the Northwest Tollway, then southeast along
the Northwest Tollway to its intersection with Lee Street, then south along Lee Street to
Higgins Road, then south and east along Higgins Road to its intersection with
Mannheim Road, then south along Mannheim Road to its intersection with Irving Park
Road, then west along Irving Park Road to its intersection with the Cook County -

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DuPage County line, then north and west along the county line to the point of beginning;
and
2) that portion of the City of Chicago located within the following area:
Beginning at the intersection of West 55th Street with Central Avenue, then east along
West 55th Street to its intersection with South Cicero Avenue, then south along South
Cicero Avenue to its intersection with West 63rd Street, then west along West 63rd
Street to its intersection with South Central Avenue, then north along South Central
Avenue to the point of beginning; and
3) that portion of the City of Chicago located within the following area:
Beginning at the point 150 feet west of the intersection of the west line of North Ashland
Avenue and the north line of West Diversey Avenue, then north 150 feet, then east
along a line 150 feet north of the north line of West Diversey Avenue extended to the
shoreline of Lake Michigan, then following the shoreline of Lake Michigan (including
Navy Pier and all other improvements fixed to land, docks, or piers) to the point where
the shoreline of Lake Michigan and the Adlai E. Stevenson Expressway extended east
to that shoreline intersect, then west along the Adlai E. Stevenson Expressway to a
point 150 feet west of the west line of South Ashland Avenue, then north along a line
150 feet west of the west line of South and North Ashland Avenue to the point of
beginning.”
The boundaries are delineated on a map and described on the Department’s Form IDOR-535.
Portions of the Chicago River are located within the boundaries described in paragraph (3).
Food, alcoholic beverages, and soft drinks sold at retail for consumption on boats and other
watercraft located within these boundaries at the time the sales are made are subject to the
Metropolitan Pier and Exposition Authority Retailers’ Occupation Tax.
Section 13(b) of the Act provides that tax may also be levied on food, alcoholic beverages, and
soft drinks sold on boats and other watercraft departing from and returning to the shoreline of Lake
Michigan (including Navy Pier and all other improvements fixed to land, docks, or piers) described in
paragraph (3). This provision makes it clear that the MPEA boundaries include Lake Michigan when
a watercraft departs from the shoreline of Lake Michigan (including Navy Pier and all other
improvements fixed to land, docks, or piers) and returns to the same shoreline. Food, alcoholic
beverages and soft drinks are subject to tax when sold during excursions within this area.
The Department cannot support the interpretation of Section 13 (b) which you advocate. It is
the Department’s position that the language regarding watercraft departing from and returning to the
shoreline of Lake Michigan is not intended to limit the scope of the tax to only those watercraft that
leave the shoreline of MPEA boundaries. Instead, these provisions address the unique issues raised
by the sale of food and beverages on watercraft afloat on waters (Lake Michigan) contiguous to the
land-based boundaries of the MPEA region. Section 13(b) unequivocally provides that if such
watercraft depart from and return to the shoreline of Lake Michigan, they are considered to be within

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the MPEA region and tax can be levied on sales made while the watercraft are afloat on Lake
Michigan. Absent such language, authority to tax these transactions could be disputed, as these
watercraft are afloat on waters outside the land-based boundaries of the MPEA region. Because of
Section 13(b), however, watercraft that originate and terminate their trips at a dock on the shoreline of
the MPEA region cannot avoid tax by asserting that their sales are made outside MPEA territory.
As noted above, the provisions of Section 13(b) address the unique circumstances of
watercraft afloat on Lake Michigan. Unlike these watercraft, your client’s watercraft are located within
the boundaries of the MPEA region, i.e., on portions of the Chicago River that are clearly within
boundaries of the MPEA region. The existence of a specific statutory provision added to resolve
ambiguity regarding authority to tax watercraft afloat on Lake Michigan does not negate imposition of
tax on watercraft that are indisputably located within the boundaries of the MPEA region. As such,
all sales made by watercraft that depart from and return to locations on the Chicago River which are
within the boundaries of the MPEA region are subject to tax (whether those excursions occur on the
Chicago River or both the Chicago River and Lake Michigan).
I hope this information is helpful. If you have further questions related to the Illinois sales tax
laws, please visit our website at www.tax.illinois.gov or contact the Department’s Taxpayer
Information Division at (217) 782-3336.
Very truly yours,

Richard S. Wolters
Associate Counsel
RSW:bkl