August 31, 2016 – A Chicago tour boat company is asking a Cook County circuit judge to rule an administrative law judge was right to say the county cannot apply an amusement tax on its Chicago River and Lake Michigan boat tours.

On August 23 in Cook County Circuit Court, Mercury Skyline Yacht Charters Inc., and Mercury Sightseeing Boats Inc., filed as a “protective measure” a request for an administrative review, asking that a judge review a ruling by the administrative law judge regarding Mercury’s protest against an amusement tax the county sought to impose.

Mercury operates seven boats that are used for cruises on Lake Michigan and architectural tours along the Chicago River. On the architectural tours, Chicago Architecture Foundation guides provide commentary. On four of the six non-architectural sightseeing cruises, Mercury crew members provide commentary. There is no commentary for the other two.

Cook County Department of Revenue tried to impose an amusement tax on Mercury in September 2014 but Mercury protested the tax, saying it violated the equal protection guarantees of the Illinois and United States constitutions because the county did not tax walking tours of city landmarks. Mercury also claimed their boat tours should be considered “live entertainment” and thus exempt from the tax.

Mercury had a hearing before a county administrative law judge in February 2016. According to Mercury’s court filing, the judge ruled on July 19 the tax should apply to Mercury’s architectural tours and to four of the sightseeing cruises with commentary but the tax did not apply to the two cruises without commentary.

Nevertheless, the judge said Mercury was totally exempt under the United States Maritime Transportation Safety Act of 2002, which prohibits – except in limited circumstances – non-federal agencies from taxing vessels that travel on navigable waters under federal authority.

The administrative law judge did not address Mercury’s constitutional argument. Mercury was apparently glad it did not have to pay the tax but unhappy with the finding its operations were considered “amusement” and the possibility that, if not for the overriding federal law, the company would have needed to fork over the tax. (Left) Skyline Queen passes 225 West Wacker Drive.

Seeking other legal ground on which to stand, Mercury visited Cook County Circuit Court last week, asking a judge to affirm the administrative law judge’s decision finding the tours and cruises are not taxable, and reject the grounds the administrative judge cited in arriving at that decision.

In addition, Mercury wants a review of its constitutional argument.

County revenue department challenges Maritime Act exemption

Cook County Department of Revenue has also asked a Circuit Court judge to overturn the administrative law judge’s ruling that the Maritime Act bars the county from assessing the amusement tax. Further, the department is trying to head off Mercury’s request for review in circuit court by contending Mercury should never have had a county administrative hearing in the first place, because Mercury missed the filing deadline for the hearing.

Mercury countered it did file in time and the administrative law judge agreed. Mercury is arguing the department has no right to now maintain Mercury was tardy for the administrative hearing, given the department did not raise the issue at the hearing.

Court documents do not indicate how much potential tax money is at stake in the legal actions.

Mercury is represented by the Chicago firm of Jenner & Block. A status hearing is set for October 18 before Circuit Judge Ann Collins-Dole.