Exelon Corp. v. Department of Revenue (234 Ill. 2d 266, 2009)

JUSTICE FREEMAN

delivered the judgment of the court, with opinion.

Chief Justice Fitzgerald and Justices Kilbride, Gar-man, and Karmeier concurred in the judgment and opinion.

Justice Thomas specially concurred, with opinion.

Justice Thomas also dissented upon denial of rehearing, with opinion.

Justice Burke took no part in the decision.

OPINION

Plaintiff, Exelon Corporation, as successor to Unicom Corporation, filed a complaint in the circuit court of Cook County seeking administrative review of a decision by the Department of Revenue (Department). The Department denied plaintiffs claim for replacement tax investment credits provided by section 201(e) of the Illinois Income Tax Act (35 ILCS 5/201(e) (West 1994)). The circuit court confirmed the Department’s decision, and the appellate court affirmed. 376 Ill. App. 3d 918. We allowed plaintiffs petition for leave to appeal (210 Ill. 2d R. 315(a)).

I. BACKGROUND

The facts are undisputed. Commonwealth Edison (ComEd) was a wholly owned subsidiary of Unicom Corporation. During the years 1995 and 1996, ComEd was a public utility company principally engaged in the production, purchase, transmission, distribution and sale of electricity. During those years, ComEd bought nearly $3 billion in property that it used for generating, transmitting, and distributing electricity to its customers.

Unicom filed a combined 1995 and 1996 Illinois tax return. Unicom was liable for the “personal property tax replacement income tax” imposed by section 201(c) of the Illinois Income Tax Act. See 35 ILCS 5/201 (c) (West 1994). Unicom timely filed amended returns, in which it claimed investment credits against this tax liability provided by section 201(e) of the Income Tax Act. Section 201(e) provides a tax credit for investments in property used in Illinois by, among others, retailers. The section defines “retailing” as “the sale of tangible personal property or services rendered in conjunction with the sale of tangible consumer goods or commodities.” See 35 ILCS 5/201(e) West 1994). Unicom claimed a section 201(e) credit of $10,419,507 for 1995, and claimed a section 201(e) credit of $4,398,115 for 1996. The Department denied both claims.

Unicom filed an administrative protest and requested a hearing. The Department and Unicom filed cross-motions for summary judgment. The sole disputed point of law was whether Unicom was engaged in “retailing” as defined by section 201(e). The Department contended that Unicom was not engaged in retailing because it did not sell “tangible personal property,” but rather sold electricity, which was intangible. Unicom contended that electricity was “tangible personal property” as required by the statute. Unicom attached to its motion an affidavit and report from its expert witness, Dr. Joel Fajans, a professor of physics at the University of California, Berkeley. Dr. Fajans opined that “as a matter of irrefutable scientific fact, electricity is physical and material” because it can be measured and stored, obeys physical laws, and “can be felt, tasted and seen.”

Unicom further contended that the Department’s denial of the section 201(e) credit violated the uniformity clause of the Illinois Constitution (Ill. Const. 1970, art. IX, §2). Unicom claimed that it was the Department’s policy to grant such tax credits to natural gas utility companies but not to electric utility companies. Unicom argued that there was no possible justification for discriminating between natural gas and electric utilities based on the purposes and object of section 201(e).

The Administrative Law Judge (ALJ) recommended granting summary judgment in favor of the Department. The ALJ’s written recommendation accepted the Department’s arguments, which did not include any rebuttal of Dr. Fajans’ expert opinion. Relying on this court’s decision in Farrand Coal Co. v. Halpin, 10 Ill. 2d 507 (1957), the ALJ concluded that the General Assembly did not intend to include electricity within the meaning of “tangible personal property” when enacting section 201(e). Also, the ALJ accepted the Department’s argument pertaining to the uniformity clause. The ALJ concluded: “[TJhere is a real and substantial difference in the classes of persons to whom the credit is available, and that this difference is related to Illinois’ longstanding [sic] public policy of treating differently, for tax purposes, persons who sell tangible personal property versus persons who do not.” The Director of Revenue accepted the ALJ’s recommendation.

Unicom filed a complaint for administrative review of the Department’s decision. Exelon thereafter succeeded Unicom. The circuit court substituted Exelon for Unicom in the case caption, and confirmed the Department’s decision.

The appellate court upheld the circuit court’s confirmation of the Department’s decision. 376 Ill. App. 3d 918. The appellate court viewed this court’s Farrand Coal decision as dispositive of the case and concluded that it was “bound by the principle of stare decisis and must adhere to the decisions of our supreme court.” 376 Ill. App. 3d at 922. The appellate court held that, as a matter of law, Exelon did not engage in the sale of “tangible personal property” as required by section 201(e) of the Income Tax Act. 376 Ill. App. 3d at 921-23. Also, the appellate court rejected Exelon’s uniformity clause challenge. 376 Ill. App. 3d at 923-27. Exelon appeals to this court.

II. ANALYSIS

A. Standard of Review

The Income Tax Act provides that judicial review of the Department’s decisions be in accordance with the Administrative Review Law (735 ILCS 5/3 — 101 et seq. (West 1994)). 35 ILCS 5/1201 (West 1994). In a case arising under the Administrative Review Law, we review the decision of the administrative agency, not the determination of the circuit court. Wade v. City of North Chicago Police Pension Board, 226 Ill. 2d 485, 504 (2007); Marconi v. Chicago Heights Police Pension Board, 225 Ill. 2d 497, 531 (2006).

The Administrative Review Law provides that judicial review extends to all questions of law and fact presented by the entire record. 735 ILCS 5/3 — 110 (West 1994). The proper standard of review depends on whether the question presented is one of fact, one of law, or a mixed question of fact and law. Cinkus v. Village of Stickney Municipal Officers Electoral Board, 228 Ill. 2d 200, 210 (2008); Elementary School District 159 v. Schiller, 221 Ill. 2d 130, 142 (2006). The Review Law limits judicial review to the administrative record; the court may not hear new or additional evidence. The statute additionally mandates that the “findings and conclusions of the administrative agency on questions of fact shall be held to be prima facie true and correct.” 735 ILCS 5/3 — 110 (West 1994). Accordingly, when a court reviews an administrative agency’s factual findings, it will not reweigh the evidence or substitute its judgment for that of the agency. Rather, the court will only ascertain whether such findings of fact are against the manifest weight of the evidence. American Federation of State, County & Municipal Employees, Council 31 v. Illinois State Labor Relations Board, State Panel, 216 Ill. 2d 569, 577 (2005); Comprehensive Community Solutions, Inc. v. Rockford School District No. 205, 216 Ill. 2d 455, 471-72 (2005). In contrast, an agency’s conclusion on a question of law is reviewed de novo. American Federation of State, County & Municipal Employees, 216 Ill. 2d at 577; City of Belvidere v. Illinois State Labor Relations Board, 181 Ill. 2d 191, 205 (1998).

A mixed question of fact and law asks the legal effect of a given set of facts. Cinkus, 228 Ill. 2d at 211; Comprehensive Community Solutions, 216 Ill. 2d at 472. Mixed questions of fact and law are “ ‘questions in which the historical facts are admitted or established, the rule of law is undisputed, and the issue is whether the facts satisfy the statutory standard, or to put it another way, whether the rule of law as applied to the established facts is or is not violated.’ ” American Federation of State, County & Municipal Employees, 216 Ill. 2d at 577, quoting Pullman-Standard v. Swint, 456 U.S. 273, 289 n.19, 72 L. Ed. 2d 66, 80 n.19, 102 S. Ct. 1781, 1790 n.19 (1982). An agency’s conclusion on a mixed question of fact and law is reviewed for clear error. An administrative decision is clearly erroneous when the reviewing court is left with the definite and firm conviction that a mistake has been committed. American Federation of State, County & Municipal Employees, 216 Ill. 2d at 577-78.

Unlike Pullman-Standard, where the rule of law was undisputed, this case presents solely questions of law. The Department and the appellate court each considered itself bound by this court’s tangential discussion of the physical properties of electricity in Farrand Coal Co. v. Halpin, 10 Ill. 2d 507 (1957). In determining whether and to what extent Farrand Coal controls the outcome of the present case, this court has the power and the duty to reexamine the authorities and legal concepts invoked in that opinion. See Bradley v. Fox, 7 Ill. 2d 106, 111 (1955). As will be explained, every aspect of our analysis involves construing section 201(e) of the Income Tax Act. This is a pure question of law and our review is de novo. See, e.g., Envirite Corp. v. Illinois Environmental Protection Agency, 158 Ill. 2d 210, 214 (1994).

B. The Merits

Before this court, Exelon contends that it qualifies for the section 201(e) tax credit because it falls within the terms of the statute. Exelon alternatively contends that denial of the section 201(e) tax credit violates the uniformity clause of the Illinois Constitution (Ill. Const. 1970, art. IX, §2). It is quite established that this court will not address constitutional issues that are unnecessary for the disposition of the case. See, e.g., In re E.H., 224 Ill. 2d 172, 178 (2006) (collecting cases). As the Department correctly observed in its motion for summary judgment and at oral argument before this court, if Exelon qualifies for the section 201(e) tax credit as a matter of statutory construction, then there is no reason to reach the alternative constitutional issue. See, e.g., Mattis v. State Universities Retirement System, 212 Ill. 2d 58, 74-75 (2004); Bonaguro v. County Officers Electoral Board, 158 Ill. 2d 391, 396 (1994).

1. “Tangible Personal Property”

To determine whether Exelon qualifies for the section 201(e) tax credit, we engage in a two-tier analysis. First, we analyze section 201(e) itself to determine the boundaries of the statute. Second, we determine whether section 201(e) applies in this particular case. See Van’s Material Co. v. Department of Revenue, 131 Ill. 2d 196, 201-02 (1989); Zenith Electronics Corp. v. Department of Revenue, 293 Ill. App. 3d 651, 654 (1997).

The fundamental rule of statutory construction is to give effect to the intention of the legislature. A court’s analysis begins with the language of the statute, which is the best indication of legislative intent. Where the statutory language is clear and unambiguous, the court must give it effect without resort to other tools of interpretation. In construing a statute, it is never proper for a court to depart from plain language by reading into the statute exceptions, limitations, or conditions that conflict with the clearly expressed legislative intent. County of Knox ex rel. Masterson v. The Highlands, L.L.C., 188 Ill. 2d 546, 556 (1999); Davis v. Toshiba Machine Co., America, 186 Ill. 2d 181, 184-85 (1999). Absent statutory definitions indicating a different legislative intent, words in a statute are to be given their ordinary and popularly understood meaning. To ascertain the ordinary and popular meaning of words, this court sometimes uses the dictionary as a resource. People ex rel. Daley v. Datacom Systems Corp., 146 Ill. 2d 1, 15 (1991); see Gem Electronics of Monmouth, Inc. v. Department of Revenue, 183 Ill. 2d 470, 477-78 (1998). Construing a statute is a pure question of law and our review is de novo. City of Belvidere, 181 Ill. 2d at 205.

Section 201(c) of the Income Tax Act imposes a “personal property tax replacement income tax” on “the privilege of earning or receiving income” in Illinois. 35 ILCS 5/201(c) (West 1994). Section 201(e) provides a credit against the personal property replacement income tax for investments in “qualified property.” 35 ILCS 5/201(e) (West 1994). The statute defines “qualified property,” in pertinent part, as property “used in Illinois by a taxpayer who is primarily engaged in manufacturing, or in mining coal or fluorite, or in retailing.” 35 ILCS 5/201(e)(2)(D) (West 1994). This section lastly provides: “For purposes of this subsection (e), the term ‘retailing’ means the sale of tangible personal property or services rendered in conjunction with the sale of tangible consumer goods or commodities.” 35 ILCS 5/201(e)(3) (West 1994). The issue in this case is whether electricity is “tangible personal property.” If so, then Exelon’s business of selling electricity constitutes “retailing” as defined by section 201(e), thereby qualifying Exelon for the tax credit. The Income Tax Act does not define the term “tangible personal property.”

The Department and the appellate court considered this court’s analysis in Farrand Coal to be dispositive of Exelon’s claim for a section 201(e) tax credit. In Farrand Coal, this court considered the meaning of the phrase “tangible personal property” in the context of the Retailers’ Occupation Tax Act (Ill. Rev. Stat. 1955, ch. 120, par. 440 et seq.). In the Retailers’ Occupation Tax Act at that time, as in the Income Tax Act before us, the legislature used the word “tangible” to define the term “retail” without defining the word “tangible.” Assuming that the words had their ordinary and popular meaning, this court referred to Webster’s, which defined “tangible” as:

“ ‘Capable of being touched; also, perceptible to the touch; tactile; palpable.’ [Citation.]

The same dictionary gives the law definition of the term ‘tangible property’ as ‘Corporeal property either real or personal’ and defines ‘corporeal’ as meaning ‘Of the nature of, consisting of, or pertaining to, matter or a material body; physical; bodily; material; — opposed to spiritual or immaterial *** Tangible or palpable.’ ” (Emphases omitted.) Farrand Coal, 10 Ill. 2d at 511, quoting Webster’s New International Dictionary (2d ed. 1946).

This court has adhered to this definition of “tangible.” See First National Bank of Springfield v. Department of Revenue, 85 Ill. 2d 84, 88 (1981). Exelon agrees with the Department and the appellate court that this definition of “tangible” should be used in construing section 201(e).

However, Exelon contends that neither the Department nor the appellate court conducted the second tier of the analysis this court described in Van’s Material, which applies the definition of “tangible” to the facts of this case. Rather, according to Exelon, the Department and the appellate court relied on Farrand Coal in concluding, as a matter of law, that electricity is not tangible personal property. Indeed, the appellate court observed that it was “bound by the principle of stare decisis and must adhere to the decisions of our supreme court.” 376 Ill. App. 3d at 922. Exelon assigns error to this conclusion. Exelon argues that Farrand Coal concerned the tangibility of coal, not electricity, and that this court’s few comments regarding electricity were dicta.

Obiter dictum refers to a remark or expression of opinion that a court uttered as an aside, and is generally not binding authority or precedent within the stare decisis rule. Cates v. Cates, 156 Ill. 2d 76, 80 (1993); Department of Public Works & Buildings v. Butler Co., 13 Ill. 2d 537, 545 (1958). As more fully stated: “A dictum is ‘any statement made by a court for use in argument, illustration, analogy or suggestion. It is a remark, an aside, concerning some rule of law or legal proposition that is not necessarily essential to the decision and lacks the authority of adjudication.’ ” United States v. Crawley, 837 F.2d 291, 292 (7th Cir. 1988), quoting Stover v. Stover, 60 Md. App. 470, 476, 483 A.2d 783, 786 (1984). There are several indications that a particular statement or passage in a prior opinion may be dictum:

“One is that the passage was unnecessary to the outcome of the earlier case and therefore perhaps not as fully considered as it would have been if it were essential to the outcome. A closely related reason is that the passage was not an integral part of the earlier opinion — it can be sloughed off without damaging the analytical structure of the opinion, and so it was a redundant part of that opinion and, again, may not have been fully considered.” Crawley, 837 F.2d at 292.

See People v. Young, 365 Ill. App. 3d 753, 770-71 (2006) (citing Crawley). In contrast, “an expression of opinion upon a point in a case argued by counsel and deliberately passed upon by the court, though not essential to the disposition of the cause, if dictum, is a judicial dictum. [Citations.] And further, a judicial dictum is entitled to much weight, and should be followed unless found to be erroneous.” (Emphasis added.) Cates, 156 Ill. 2d at 80. We agree with Exelon that this court’s references to the tangibility of electricity in Farrand Coal were obiter dicta.

In Farrand Coal, the plaintiff coal company attempted to avoid paying sales tax imposed under the Retailers’ Occupation Tax Act on the sale of coal to the city of Springfield, which operated an electric utility company. The coal company paid the sales tax under protest and sought to enjoin the Director of Revenue from collecting the payments. The circuit court dismissed the coal company’s complaint, and the coal company appealed. Farrand Coal, 10 Ill. 2d at 507-08. The tax was payable on a sale of “ ‘tangible personal property to a purchaser, for use or consumption and not for resale in any form as tangible personal property.’ ” Farrand Coal, 10 Ill. 2d at 510, quoting Ill. Rev. Stat. 1955, ch. 120, par. 440. The coal company characterized its sale of coal as a sale for resale not subject to sales tax. It argued that what it actually sold was not the coal itself, but rather the “energy” stored in the coal, and that the electric utility bought the “energy” in the coal to convert it to electric “energy” and resell it. The coal company alleged “that the energy sold by the utility is the same energy it purchased, though changed in form into electrical energy; that the energy in the coal constitutes an ingredient or constituent or material of the electrical energy.” Farrand Coal, 10 Ill. 2d at 508.

This court viewed the issue presented in Farrand Coal as follows:

“The basic issue to be resolved in determining this case is whether, under the act in question, coal is sold as tangible personal property to the utility for use or consumption and not for resale and is therefore the measure of a taxable retail sale, or whether energy, as tangible personal property, is bought in the form of coal, extracted therefrom, processed and resold as tangible personal property in the form of electrical energy.” (Emphases added.) Farrand Coal, 10 Ill. 2d at 509-10.

This court made clear that the coal company’s coal was the focus of the case and not the electric company’s electricity:

“It seems patently clear that plaintiff is engaged in the business of selling coal to utilities. Such coal constitutes tangible personal property within the popular meaning of that term as used in the act in question. The coal is used by the utility to generate electrical energy. Such use is by the burning or combustion of the coal. When burned, the coal is gone except for the ash residue. It is difficult to perceive how there could be a more complete use or consumption of the coal within the meaning of the act. Clearly plaintiff coal company has sold tangible personal property to the utility for use or consumption.” (Emphases added.) Farrand Coal, 10 Ill. 2d at 513.

This was the dispositive reasoning of Farrand Coal. Indeed, affirming the circuit court, this court held: “Coal was sold as tangible personal property to the utility for use or consumption and not for resale within the meaning of the Retailers’ Occupation Tax Act and is therefore the measure of a taxable retail sale.” (Emphasis added.) Farrand Coal, 10 Ill. 2d at 513. In Farrand Coal, this court never had to — and never did — address definitively the issue of whether electricity is tangible.

The Department characterizes this view of Farrand Coal as “myopic.” The Department argues that “whether electricity was tangible personal property was critical to the plaintiffs case.” In Farrand Coal, the coal company included in its contention the following allegation and reasoning:

“that the energy purchased by the utility and also the electrical energy sold by the utility are both tangible personal property; that since the energy purchased by the utility is tangible personal property and the same energy is resold by the utility to its customers, the energy is not used or consumed by the utility.” Farrand Coal, 10 Ill. 2d at 508.

Therefore, according to the coal company, the sale of “energy” to the electric utility was not subject to sales tax. Farrand Coal, 10 Ill. 2d at 508-09.

The court in Farrand Coal rejected the coal company’s arguments. The court observed:

“From the evidence it appears that although energy and mass are closely interrelated, indestructible, equivalent, interchangeable, directly proportional to and may be equated with each other, yet energy as such cannot be separated from mass or matter and stored, weighed, transported, handled, liquified, solidified, photographed, touched or otherwise perceived by the senses in its own right or capacity separate and apart from mass or matter. All witnesses who testified on the subject, including plaintiffs witnesses, agreed that energy cannot be separated from matter and tagged or otherwise physically identified in any way, cannot be located spatially, and does not have dimensions. In all these respects energy falls short of fitting into the ordinary and popularly understood meaning of the word ‘tangible’ as used by the General Assembly in the act in question.” Farrand Coal, 10 Ill. 2d at 511.

This court then concluded its analysis by focusing on the consumption of coal and not the tangibility of electricity. Farrand Coal, 10 Ill. 2d at 513.

However, in a three-paragraph passage, this court also recounted several cases in support of its observation that the court had “at no time held electricity to be ‘tangible’ personal property.” Farrand Coal, 10 Ill. 2d at 512. This passage was obiter dicta. Since this court rejected the coal company’s argument that energy was “trapped” in the coal, the court had no need to — and did not — deliberately consider whether electricity is “tangible.” The passage refers to Peoples Gas Light & Coke Co. v. Ames, 359 Ill. 152 (1934), in which this court concluded that a “decision as to whether or not electricity was tangible personal property was expressly declined as unnecessary to a disposition of the case.” Farrand Coal, 10 Ill. 2d at 512. This court specifically mentioned People v. Menagas, 367 Ill. 330 (1937), in which this court held that electricity was personal property and, therefore, could be the object of larceny under the Criminal Code. The State “conceded” that electricity was intangible (Menagas, 367 Ill. at 332-33), and the court so assumed (Menagas, 367 Ill. at 338). The acknowledgment of an assumption does not constitute a holding. See 20 Am. Jur. 2d Courts §134, at 517 (2005) (stating that “a case is not binding precedent on a point of law where the holding is only implicit or assumed in the decision but is not announced”). Lastly, the passage refers to People ex rel. Mercer v. Wyanet Electric Light Co., 306 Ill. 377 (1922), in which this court held that “electric utility companies are neither manufacturing nor mercantile companies so as to have their capital stock assessed locally instead of by the State assessing authority.” Farrand Coal, 10 Ill. 2d at 512. Indeed, this holding actually comports with our modern, common understanding of electric utility companies. An electric utility company is not a purely manufacturing or mercantile company. Rather, it belongs to that unique class of corporations known as public utilities. Wyanet Light, 306 Ill. at 380-81; see L. Hyman, A. Hyman & R. Hyman, America’s Electric Utilities: Past, Present and Future 89 (7th ed. 2000) (explaining that an electricity supplier must perform the following functions to deliver the product: production, marketing, transmission, distribution, metering and billing, and retail supply).

We reject the argument that this court’s discussion of electricity in Farrand Coal was beyond mere obiter dicta. The above-referenced language in Farrand Coal was overly broad and not necessary to its holding. This three-paragraph passage was clearly unnecessary to the outcome of Farrand Coal. It was redundant in that it can be sloughed off without damaging the analytical structure of the opinion. See Crawley, 837 F.2d at 292. Further, the passage in Farrand Coal was not judicial dictum. Although this issue was briefed, this court did not deliberately rule upon the point. See Cates, 156 Ill. 2d at 80. Rather, the passage was uttered as an aside. See Department of Public Works, 13 Ill. 2d at 545.

Of course: “Even obiter dictum of a court of last resort can be tantamount to a decision and therefore binding in the absence of a contrary decision of that court.” Cates, 156 Ill. 2d at 80. Therefore, in this case, it was reasonable for the appellate court to consider itself bound by this court’s discussion of the tangibility of electricity in Farrand Coal. 376 Ill. App. 3d at 922.

However, in construing legislation that lacks statutory definitions, this court cannot ignore the laws of physics as humanity has come to understand them. See, e.g., Marzullo v. Kahl, 366 Md. 158, 191, 783 A.2d 169, 188 (2001) (observing that courts “do not set aside common experience and common sense when construing statutes”).

In his recommended decision, the ALJ acknowledged that “neither party disputes the properties of electricity.” The record in the present case contains the unrebutted affidavit and report of Dr. Fajans, entitled “The Physical Nature of Electricity.” He defined electricity as the flow of electrons in a circuit. Dr. Fajans explained: “Electricity is physical and material because, microscopically, it consists of the flow and ‘pressure’ of a material entity, namely electrons, and macroscopically, it can be sensed (felt, tasted, seen, and heard), measured, weighed, and stored, and is subject to universal laws of nature.” Dr. Fajans elaborated as follows:

“Without electrons, electricity cannot be transmitted. Though electrons themselves are very small and lightweight, they are one of the basic constituents of matter; common matter like hydrogen or ion consists of electrons, protons, and neutrons in roughly equal number. Recently, scientists have been able to see electrons, or more precisely, the density of electrons, with devices called Scanning Tunneling Microscopes. *** There is nothing more physical and material than an electron. Since electricity itself consists of the flow of a material object, electricity is physical and material.”

Dr. Fajans further explained that electricity can be felt:

“You feel electricity every time you get a shock. Static shocks, from things like walking across a carpet on a dry day, are annoying, but almost always harmless. Electrical sensations from power lines range from the vibratory feeling that you may experience while gently running your fingertips over an improperly wired lamp, to the tingling feeling that you get if you touch the wires inside an electrical outlet with dry hands, to the strong twitch, pain and weakness you get from touching an outlet with wet hands, to extreme pain in more dangerous circumstances.”

As a sister court observed: “The word ‘intangible’ from its Latin roots means something that cannot be touched or perceived by touch. [Webster’s Third New International Dictionary 1173 (1993).] Electricity can be touched, and when a person does so and thereby completes an electrical circuit, it may be the last earthly sensation he or she feels.” Utilicorp United Inc. v. Director of Revenue, 75 S.W.3d 725, 728 n.6 (Mo. 2001). Dr. Fajans’ report reflects the currently understood electron theory of electricity. See, e.g., L. Hyman, A. Hyman & R. Hyman, America’s Electric Utilities: Past, Present and Future 15-19 (7th ed. 2000); see generally S. Gibilisco, Teach Yourself Electricity and Electronics 3 (4th ed. 2006) (explaining: “It is important to understand some simple general physics principles in order to have a full grasp of electricity and electronics”); S. Herman, Delmar’s Standard Textbook of Electricity (1993); D. Bodanis, Electric Universe: The Shocking True Story of Electricity (2005) (tracing understanding of electricity from mysterious force to flowing electrons).

This court’s dicta in Farrand Coal regarding the tangibility of electricity was based on our scientific knowledge of over half a century ago and was skewed by the true issue presented in that case. Our current understanding of electricity has progressed beyond that time. We need not address the parties’ alternative statutory construction arguments. We now join the several courts that have expressly held in varying contexts that electricity constitutes “tangible personal property.” See, e.g., Searles Valley Minerals Operations, Inc. v. State Board of Equalization, 160 Cal. App. 4th 514, 521, 72 Cal. Rptr. 3d 857, 862 (2008); Narragansett Electric Co. v. Carbone, 898 A.2d 87, 97-98 (R.I. 2006); Davis v. Gulf Power Corp., 799 So. 2d 298, 300 (Fla. Dist. Ct. App. 2001); Curry v. Alabama Power Co., 243 Ala. 53, 59-60, 8 So. 2d 521, 526 (1942).

2. Is Exelon Primarily Engaged in “Retailing”?

The parties agree that if electricity is “tangible personal property,” then Exelon would be engaged in “retailing” as defined by section 201(e). We have held that electricity is “tangible personal property” and, accordingly, hold that Exelon is a retailer as defined by section 201(e). The second tier of the analysis described in Van’s Material concerns whether Exelon satisfies the statutory requirements for a section 201(e) tax credit. See Van’s Material, 131 Ill. 2d at 201-02. The parties chose to litigate Exelon’s claim by means of cross-motions for summary judgment, by which they agree that no factual issues exist and that the case presents only the need to resolve the legal issue. See, e.g., Board of Trustees of Southern Illinois University v. Department of Human Rights, 159 Ill. 2d 206, 210 (1994); Allen v. Meyer, 14 Ill. 2d 284, 292 (1958). Accordingly, our determination of that legal issue is conclusive.

In its petition for rehearing, the Department asks us to modify our opinion to render it only prospective to taxes incurred, or tax credits sought, for tax periods after the filing of this opinion. Generally, judicial decisions are given retroactive as well as prospective effect. Deichmueller Construction Co. v. Industrial Comm’n, 151 Ill. 2d 413, 416 (1992). However, this court has the inherent power to conclude that a decision will not apply retroactively, but only prospectively. Deichmueller, 151 Ill. 2d at 416; Elg v. Whittington, 119 Ill. 2d 344, 356-57 (1987). Whether a decision will be applied only prospectively will depend on whether: (1) the decision establishes a new principle of law, either by overruling past precedent on which litigants may have relied, or by deciding an issue of first impression whose resolution was not clearly foreshadowed; (2) given its purpose or history, the decision’s operation will be impeded or promoted by prospective or retroactive application; and (3) a balance of the equities mandates prospective application. Bogseth v. Emmanuel, 166 Ill. 2d 507, 515 (1995); Deichmueller, 151 Ill. 2d at 417-18; Elg, 119 Ill. 2d at 357. Considering these factors in light of the instant facts, we limit our holding to an entirely prospective application.

First, we are deciding an issue of first impression where the resolution was not clearly foreseen. Albeit in obiter dicta, the above-discussed language in Farrand Coal suggested that electricity was intangible.

Second, retroactive application of our decision is not necessary to advance its purpose. The purpose of our holding is to ensure that the default legal meaning of the statutory phrase “tangible personal property” corresponds to its popularly understood meaning. Prospective application promotes the purpose of our holding by allowing the General Assembly to declare expressly its intent to include electricity if it uses the phrase “tangible personal property” in the future. See 234 Ill. 2d at 284 n.1.

Third, a balance of the equities likewise favors rendering this decision entirely prospective. Retroactive application of this decision could cause uncertainty in state tax law in general and as applied to Exelon. Conversely, limiting this decision to an entirely prospective application permits the legislature to provide direction on the meaning of the statutory phrase “tangible personal property.” Therefore, we hold that this decision will apply only prospectively to taxes incurred, or tax credits sought, for the tax year 2009 and thereafter. See, e.g., Bogseth, 166 Ill. 2d at 515-17; Gilbert v. Sycamore Municipal Hospital, 156 Ill. 2d 511, 529-30 (1993).

“It remains the mandate of this court that constitutional issues be considered only when the case may not be decided on nonconstitutional grounds.” Mulay v. Mulay, 225 Ill. 2d 601, 611 (2007). Our disposition of this cause obviates the need to determine whether the Department violated the uniformity clause of the Illinois Constitution (Ill. Const. 1970, art. IX, §2). See, e.g., Dawdy v. Union Pacific R.R. Co., 207 Ill. 2d 167, 185 (2003); Bonaguro, 158 Ill. 2d at 399.

III. CONCLUSION

We disagree with the appellate court’s conclusion that Exelon did not engage in the sale of “tangible personal property” for purposes of section 201(e) of the Income Tax Act. However, because our holding is to be applied prospectively only, we affirm the judgment of the appellate court.

Affirmed.

JUSTICE BURKE took no part in the consideration or decision of this case.

Our construction of “tangible personal property” in section 201(e) of the Income Tax Act is based on our current understanding of the tangibility of electricity. Of course, the General Assembly may define this term to include or exclude electricity as it chooses. Where the legislature defines a particular statutory term, a court is bound by the definition as long as it is reasonable. Texaco-Cities Service Pipeline Co. v. McGaw, 182 Ill. 2d 262, 275 (1998).

JUSTICE THOMAS,

specially concurring:

My colleagues are firmly convinced that they have the science of this issue correct. Unfortunately, science does not answer the question before the court, and the majority has its history and its law wrong. Consequently, I cannot join its opinion.

Two fundamental misunderstandings underlie and inform the majority opinion. The first is the mistaken belief that the central question we must resolve is whether a majority of this court believes that electricity is tangible at the subatomic level and not whether the legislature intended to include electricity within the meaning of “tangible personal property” when it enacted the tax credit in question. The Department has correctly and persuasively argued that the legislature could not have so intended. The second is a misunderstanding of Farrand Coal so profound that the majority can cast aside as obiter dicta this court’s discussion of an issue that was (a) central to the plaintiff’s case; (b) litigated in the trial court; and (c) fully briefed and argued on appeal. I will demonstrate below that such a position is not only indefensible but directly contrary to this court’s precedents. After demonstrating why Farrand Coal’s discussion of the tangibility of electricity was not obiter dicta, I will set forth both why we should not abandon Farrand Coal and why the majority’s reasons for doing so are wholly invalid.

I. OBITER DICTA

A. Dicta or Holding?

The majority correctly sets forth the distinction between obiter dictum and judicial dictum. In Cates v. Cates, 156 Ill. 2d 76, 80 (1993), this court explained that obiter dictum is a “remark or expression of opinion that a court uttered as an aside, and is generally not binding authority or precedent within the stare decicis rule.” 234 Ill. 2d at 277. “On the other hand, an expression of opinion upon a point in a case argued by counsel and deliberately passed upon by the court, though not essential to the disposition of the cause, if dictum, is a judicial dictum.” Cates, 156 Ill. 2d at 80. Because obiter dicta lies outside the stare decisis rule, the distinction between obiter dicta and judicial dicta is an important one. On the other hand, because judicial dicta has the force of a judicial determination and is entitled to much weight (Cates, 156 Ill. 2d at 80), the distinction between judicial dicta and a holding of the court is less important.

The majority, however, gives insufficient consideration to what discussions in opinions may not be considered dicta in the first place. A good summary appears in Corpus Juris Secundum:

“An adjudication on any point within the issues presented by a case is not dictum. This rule applies as to all pertinent questions, although they might be only incidentally involved, which are presented and decided in the regular course of the consideration of the case, and lead to the final conclusion, and to any statement in the opinion as to a matter on which the decision is predicated. Accordingly, a point expressly decided does not lose its value as a precedent because the disposition of the case is or might have been made on some other ground. Similarly, if a case presents two or more points, any one of which is determinative of the ultimate issue, but the court actually decides all of them, the case is an authoritative precedent on every point decided, and none of the points may be regarded as dictum. One point should not be denied authority merely because another point was more fully argued and considered, nor does a decision on one proposition make statements of the court regarding other propositions dicta.” 21 C.J.S. Courts §229, at 227 (2006).

With these principles in mind, let us now turn to Far-rand Coal’s discussion of the tangibility of electricity.

At issue in Farrand Coal was the desire of the plaintiff coal company not to pay the retailers’ occupation tax. The coal company was being taxed on its sales of coal to an electric utility. The tax in question was imposed “upon persons engaged in the business of selling tangible personal property to purchasers for use or consumption.” See Farrand Coal, 10 Ill. 2d at 510. The statute defined “sale at retail” as “any transfer of the ownership of, or title to, tangible personal property to a purchaser, for use or consumption and not for resale in any form as tangible personal property.” (Emphasis added.) Ill. Rev. Stat. 1955, ch. 120, par. 440. The statute further provided that, “Sales of tangible personal property, which property as an ingredient or constituent goes into and forms a part of tangible personal property subsequently the subject of a ‘sale at retail’, are not sales at retail as defined in this Act.” (Emphasis added.) Ill. Rev. Stat. 1955, ch. 120, par. 440. The position of the Department was that the coal company was selling tangible personal property (coal) to the electric utility for use or consumption, and, consequently, it was required to pay the tax. The coal company argued that it was exempt from paying the tax under the statute’s exception for tangible personal property resold by the purchaser. The coal company argued that the energy in the coal that it sold to the utility was resold by the utility as tangible personal property — electric energy. In its brief in Farrand Coal, the Department summarized what would be necessary for the coal company to prevail:

“For the plaintiff to prevail, it must be determined: First, that energy is tangible personal property; second, that electrical energy is merely a modified form of energy which can be proved to have been extracted from the coal, and third that the transaction between the utility and its customers actually is a sale of electrical energy as tangible personal property and not merely the selling of the work and service which the electrical energy can perform and furnish. Failure by the plaintiff to establish any one (not all, but any one) of these points will defeat the plaintiff’s whole case and make a decision in the defendants’ favor necessary.” (Emphasis added.) Farrand Coal, defendant’s brief at 61.

Consequently, both the plaintiff and the defendants presented extensive scientific testimony on the issues of whether energy and electricity are tangible personal property. The experts for the plaintiff included an associate professor of physics from Purdue University, a Ph.D. in physics in the institute for nuclear studies at the University of Chicago, a second physics professor from the University of Chicago, and the general superintendent for the utility, who was an engineering graduate from Purdue. The defense witnesses included a professor of physics from the University of Illinois and a professor of mining and metallurgical engineering from Washington University. Farrand Coal, 10 Ill. 2d at 509. The scientific testimony covered the better part of two full days. Far- rand Coal, 10 Ill. 2d at 509. The plaintiff and the defendants disagreed as to whether: (1) electrical energy is merely energy in coal in a changed form; and (2) electricity is tangible personal property. Farrand Coal, 10 Ill. 2d at 509. The briefs cover in great detail the scientific testimony offered on whether energy and electricity are tangible personal property, and the parties presented extensive appellate arguments on these points.

It is not necessary, however, for one to have read the briefs in Farrand Coal to understand that this court’s discussions of the tangibility of energy and electricity were not dicta. After all, Farrand Coal set forth the statute in question. See Farrand Coal, 10 Ill. 2d at 510. Moreover, it detailed the coal company’s argument that the electric energy sold by the utility was tangible personal property. See Farrand Coal, 10 Ill. 2d at 508. It also set forth that the coal company’s theory of the case was that “energy, as tangible personal property, is bought in the form of coal, extracted therefrom, processed and resold as tangible personal property in the form of electrical energy.” Farrand Coal, 10 Ill. 2d at 509-10. Thus, it is apparent from the face of the decision that a showing that the electric utility was selling tangible personal property to its customers was essential to the coal company’s claim and that the point was argued by the parties. Indeed, had the coal company not argued that the electric utility was selling tangible personal property to its customers, the Department would have been entitled to a judgment on that basis alone.

The Farrand Coal court ultimately addressed all parts of the parties’ claims. The court agreed with the Department that the coal company sells tangible personal property (coal) to the utility and that the coal is used or consumed by the utility. Farrand Coal, 10 Ill. 2d at 513. The court rejected plaintiff’s arguments that it is really selling energy in the coal and that the energy is resold as electric energy by the utility. Farrand Coal, 10 Ill. 2d at 513. The court explained that (1) energy is intangible (and this holding would necessarily encompass electric energy) (Farrand Coal, 10 Ill. 2d at 511); (2) energy cannot be separated from matter (Farrand Coal, 10 Ill. 2d at 511); and (3) the electric utility is not selling tangible personal property to its customers (Farrand Coal, 10 Ill. 2d at 512-13).

Accordingly, there is no possible basis for casting aside this court’s discussion of any of these issues as merely comments made “by the way” or as asides. Rather, they were points essential to the case, deliberately argued by counsel, and passed upon by the court. Every point that the court discussed in Farrand Coal was directly relevant to whether the exception for tangible personal property resold by the purchaser was applicable. Consequently, no part of the court’s opinion may be considered dicta, even if any one of the points discussed could have alone supported the court’s decision. 21 C.J.S. Courts §229, at 227 (2006); Woods v. Interstate Realty Co., 337 U.S. 535, 537, 93 L. Ed. 1524, 1526, 69 S. Ct. 1235, 1237 (1949).

The majority supports its erroneous conclusion that this passage from Farrand Coal was dicta by selectively quoting from a Seventh Circuit opinion, United States v. Crawley, 837 F.2d 291 (7th Cir. 1988). According to the majority, the discussion of the tangibility of electricity was not “necessary” to the outcome of the case because it could be sloughed off without damaging the analytical structure of the opinion. 234 Ill. 2d at 281-82. There are several problems with this assertion. First, a fuller statement of the principle the majority is thinking of is that dicta is “an opinion expressed by a judge on a point not necessarily arising in the case, or a statement in an opinion not responsive to any issue and not necessary to the decision of the case.” (Emphasis added.) 21 C.J.S. Courts §227, at 224-25 (2006). Second, far from supporting the majority’s conclusion, Crawley shows why the majority’s understanding of dicta is incorrect. In Crawley, the Seventh Circuit considered whether a prior opinion had changed the standard of proof in probation-revocation cases. The court had consistently held that the court could revoke probation if reasonably satisfied that the probationer had violated a condition of his probation. In one opinion, United States v. Yancey, 827 F.2d 83 (7th Cir. 1987), the court stated that the proof in the case satisfied the preponderance of the evidence standard. In subsequent cases, the court continued to apply the “reasonably satisfied standard.” Rather than simply stating that the statement in Yancey was a mistake or that later decisions controlled, the court endeavored to demonstrate that Yancey’s statement was dicta. The court listed several definitions of the word dicta, including that dicta is “ ‘a statement not addressed to the question before the court or necessary for its decision.’ ” (Emphasis added.) Crawley, 837 F.2d at 292, quoting American Family Mutual Insurance Co. v. Shannon, 120 Wis. 2d 560, 565, 356 N.W.2d 175, 178 (1984). The court also stated that “ ‘[t]he basic formula [for distinguishing holding from dictum] is to take account of facts treated by the judge as material and determine whether the contested opinion is based upon them.’ ” Crawley, 837 F.2d at 292, quoting United Steelworkers of America, Local 8599 v. Board of Education of the Fontana Unified School District, 162 Cal. App. 3d 823, 834, 209 Cal. Rptr. 16, 21 (1984). The court then stated that a different approach for identifying dicta, since the definitions are inconsistent, is to ask what is at stake in the definition. The court then adopted the following approach:

“What is at stake in distinguishing holding from dictum is that a dictum is not authoritative. It is the part of an opinion that a later court, even if it is an inferior court, is free to reject. So instead of asking what the word ‘dictum’ means we can ask what reasons there are against a court’s giving weight to a passage found in a previous opinion. There are many. One is that the passage was unnecessary to the outcome of the earlier case and therefore perhaps not as fully considered as it would have been if it were essential to the outcome. A closely related reason is that the passage was not an integral part of the earlier opinion — it can be sloughed off without damaging the analytical structure of the opinion, and so it was a redundant part of that opinion and, again, may not have been fully considered. Still another reason is that the passage was not grounded in the facts of the case and the judges may therefore have lacked an adequate experiential basis for it; another, that the issue addressed in the passage was not presented as an issue, hence was not refined by the fires of adversary presentation. All these are reasons for thinking that a particular passage was not a fully measured judicial pronouncement, that it was not likely to be relied on by readers, and indeed that it may not have been part of the decision that resolved the case or controversy on which the court’s jurisdiction depended (if a federal court).” (Emphases added.) Crawley, 837 F.2d at 292-93.

The court ultimately concluded that Yancey’s statement about the preponderance standard was dicta because the issue of the proper standard had not been raised in that case and, since the evidence satisfied the higher preponderance standard, the court had no occasion to consider whether the defendant’s probation should have been revoked based on the lower “reasonably satisfied” standard. Thus, the court was dealing with a single sentence on an issue that had not been briefed or argued. What in the above discussion suggests that the Seventh Circuit would consider as dicta a discussion that was not only the longest discussion in an opinion but also addressed an issue that was (1) fully briefed by the parties (even more extensively than in the present case); (2) directly relevant to whether the statute applied; (3) essential to the plaintiff’s case; and (4) the only part of the discussion that grounded the court’s analysis in the court’s precedents? The discussion to which the majority refers was not redundant and removing it absolutely would have damaged the analytical structure of the opinion. If we ignore for the moment the fact that “sloughing off” this analysis would still leave the holdings that energy is intangible and that electric utilities are not retailers of tangible personal property intact, without this analysis, none of the court’s precedents would have been discussed. The court obviously considered it important to point out that the coal company’s arguments had no support in this court’s precedents and that all contrary out-of-state authority on the issue was distinguishable.

Moreover, the majority’s view of what it means for something to be “necessary” for a court’s decision would necessarily render vast amounts of supreme and appellate court case law mere dicta. According to the majority, the discussion of the tangibility of electricity or electrical energy was dicta because the court had already given another reason for holding that the statutory exception did not apply. 234 Ill. 2d at 282. But this would necessarily mean that in every case in which a court gives more than one reason for its holding, only the first reason would be a judicial determination and all other reasons would be mere dicta. Not only is this not the law (see Woods, 337 U.S. at 537, 93 L. Ed. at 1526, 69 S. Ct. at 1237 (“where a decision rests on two or more grounds, none can be relegated to the category of obiter dictum,”)’, United States v. Title Insurance & Trust Co., 265 U.S. 472, 68 L. Ed. 1110, 44 S. Ct. 621 (1924) (same); Richmond Screw Anchor Co. v. United States, 275 U.S. 331, 72 L. Ed. 303, 48 S. Ct. 194 (1928) (reason for court’s conclusion is not obiter dictum merely because another reason was more fully argued and considered)), it is terrible as policy. The majority’s position will mean that a court wishing to give several reasons for its holding will either have no incentive to do so or will not be able to list the reasons in the most logical sequence. Rather, the court will have to choose what reason it wants to be binding precedent and put that discussion first.

It appears that the majority might be confusing the analysis in Farrand Coal with the situation in which the resolution of one issue substantively precludes resolution of the other. Corpus Juris Secundum gives two examples of what it means for a court’s discussion to be unnecessary to the decision:

“For instance, once a court determines that a statute does not apply to a case, any statement concerning the statute’s constitutionality is dictum. Similarly, when a court dismisses a case for lack of jurisdiction, any further discussion of the merits is dictum.” 21 C.J.S. Courts §227, at 225 (2006).

This makes perfect sense. A court cannot rule on the constitutionality of a statute that is not before it, nor can the court rule on the merits of a case over which it lacks jurisdiction. But there is no reason why a court may not give several reasons why a statute does not apply to a case, and there is no “one and done” rule rendering every reason after the first one obiter dicta. The majority bases its dicta holding not on any legitimate substantive reason, but simply on the manner in which Justice Bristow chose to structure his opinion.

In sum, there is no dicta in Farrand Coal. The court’s opinion in that case is a concise, to-the-point analysis, giving several reasons why the statutory exception for tangible personal property resold by the purchaser does not apply. Every sentence in the court’s opinion is directly relevant to that issue and is responsive to a point put in contention by the parties.

B. Judicial Dicta or Obiter Dicta?

Even if we assume for the sake of argument that the court’s discussion of the tangibility of electricity was dicta, for all of the reasons set forth above, it could only be judicial dicta. As this court explained in People v. Williams, 204 Ill. 2d 191, 206 (2003):

“Dicta normally comes in two varieties: obiter dicta and judicial dicta. Obiter dicta are comments in a judicial opinion that are unnecessary to the disposition of the case. Black’s Law Dictionary 1100 (7th ed. 1999). Judicial dicta are comments in a judicial opinion that are unnecessary to the disposition of the case, but involve an issue briefed and argued by the parties. Black’s Law Dictionary 465 (7th ed. 1999).”

Or, as stated in Cates, the relevant question in determining whether dicta is obiter dicta or judicial dicta is to what extent the issue was before the court. Cates, 156 Ill. 2d at 81. The tangibility of electricity could not have been more central or relevant to the issue in Farrand Coal, and the issue was litigated in the trial court and briefed extensively on appeal.

The majority does not attempt to argue that this issue was not before the court in Farrand Coal. Instead, the majority seizes on the statement in Cates that judicial dicta is an expression of an opinion on a point argued by the parties and deliberately passed upon by the court, but not essential to the disposition of the case. Cates, 156 Ill. 2d at 80. The majority claims that the issue was not “deliberately passed upon,” and therefore the discussion was not judicial dicta. To reiterate: in Farrand Coal, this court held that energy is intangible. Farrand Coal, 10 Ill. 2d at 511. This holding necessarily applies to electrical energy. The defendants in Farrand Coal, when arguing that electrical energy is intangible, incorporated by reference their arguments about energy in general, noting that “if energy is intangible, electric energy (which is just a form of energy) is necessarily intangible.” Farrand Coal, defendants’ brief at 35-36. The court then explained that any argument that electricity is tangible finds no support in this court’s case law and all out-of-state opinions holding it to be tangible are distinguishable. Farrand Coal, 10 Ill. 2d at 512. The court summed up by holding that the sale of electrical energy by an electric utility is not a sale at retail of tangible personal property. Farrand Coal, 10 Ill. 2d at 513. So, according to the majority, holding that all energy is intangible, that any argument that electricity is tangible finds no support in this court’s case law, that all out-of-state cases that hold electricity to be tangible are distinguishable, and that the sale of electrical energy is not a sale at retail of tangible personal property is not “deliberately passing” upon the question. Clearly, obiter dicta is now whatever this court wants it to be. Should it be any surprise that no court to consider Farrand Coal thought that this court was merely making comments as asides when it addressed this question? See Waukegan Community Unit School District No. 60 v. City of Waukegan, 95 Ill. 2d 244, 253 (1983) (citing Farrand Coal for the proposition that public utilities are in the business of rendering a service rather than in selling tangible personal property); 376 Ill. App. 3d at 921-23 (Farrand Coal classified electricity as intangible property); Electric Energy, Inc. v. Hamer, 373 Ill. App. 3d 733, 736 (2007) (citing Farrand Coal for the proposition that “the sale of electricity is the sale of a service”); Union Coal Co. v. Department of Revenue, 38 Ill. App. 3d 293, 294 (1976) (“In the Farrand case the court held an electric utility company does not sell tangible personal property when it sells electricity or electrical energy”). Ironically, it appears that the majority believes that Farrand Coal passed upon the question too. The majority states that it was reasonable for the appellate court to consider itself bound by Farrand Coal (234 Ill. 2d at 282), but that we are now abandoning that case because our scientific understanding has progressed since that case was decided (234 Ill. 2d at 284). These statements make sense only if Farrand Coal did pass upon the question.

Because there is no legitimate debate as to whether this court’s discussion of the tangibility of electricity was “an expression of opinion upon a point in a case argued by counsel and deliberately passed upon by the court” (Cates, 156 Ill. 2d at 80), the majority opinion represents a clear and unequivocal repudiation of Cates and its progeny. Clearly, there is no longer a distinction in Illinois between judicial dicta and obiter dicta. Because the distinction that Cates drew is an important and valid one that has been applied by this court and other courts for years, I believe that any overruling of this precedent should be explicit and include a discussion of why it is appropriate to depart from stare decisis. Cates is too important and well established to be overruled sub silentio.

C. What Farrand Coal Was Not About

Next, I must briefly point out what was not the issue in Farrand Coal. The majority notes that Exelon argues that Farrand Coal concerned the tangibility of coal, not electricity. 234 Ill. 2d at 276-77. Because the majority does not repudiate this obviously false statement, it is unclear if this argument influenced the majority’s erroneous conclusion that the discussion of the tangibility of electricity was dicta. Of course the issue in Farrand Coal was not whether coal is tangible. In the first place, who would argue that coal is intangible? Such an assertion would be preposterous on its face and almost certainly would never be the focus of a supreme court opinion. In fact, such a position would be so absurd that even anyone who had never read Farrand Coal would have a pretty good idea that this could not have been the issue in that case.

Second, why would anyone have argued that coal is intangible? Such a position would have been fatal to both parties’ cases. Both parties needed coal to be tangible for their arguments to succeed. The Department wanted to tax the plaintiff on the basis that its sale of coal was a sale