IL Supreme Court Rules For Rolling Meadows In Restaurant Tax Battle

ARLINGTON HEIGHTS, IL — A restaurant located in Arlington Heights has been at the center of a tax dispute between the Village and Rolling Meadows for a number of years. On Thursday, the Illinois Supreme Court ruled in favor of the latter despite a tax revenue error that resulted in nearly $1.2 million going to the wrong municipality, according to Arlington Heights officials.

Cooper's Hawk Winery, located on the border of the two municipalities, opened in 2011. The restaurant, located at 798 W. Algonquin Road, was wrongly coded by the Illinois Department of Revenue as being in Rolling Meadows, which led to Arlington Heights suing Rolling Meadows.

Both Arlington Heights and Rolling Meadows began receiving annual reports from the IDOR listing the restaurant as being in Rolling Meadows, and because neither municipality responded to the notifications with corrections, IDOR accepted the information as correct, per its practice, according to the lawsuit.

In March 2020, Arlington Heights officials discovered the Cooper's Hawk location error and notified IDOR. The tax revenues generated by Cooper's Hawk between June 2011 and March 2020 exceeded $1.1 million. IDOR reimbursed Arlington Heights for six months of tax revenues in the amount of $109,000.

Two years later, Arlington Heights sued Rolling Meadows to recover the remainder of the money, but Cook County circuit court dismissed the complaint for lack of jurisdiction.

Rolling Meadows has always contended the IDOR has exclusive jurisdiction over tax disputes, and the trial court properly dismissed Arlington Heights' complaint.

Thursday's ruling held that Rolling Meadows could keep the tax revenues even though the Illinois Appellate Court had earlier ruled that Arlington Heights could pursue claims for its money, essentially overturning that decision.

"This is not how responsible governments and good neighbors operate," Arlington Heights Mayor Thomas Hayes said in a statement shared with Patch. "This was a case of unjust enrichment, and right versus wrong. It is wrong for Rolling Meadows to keep taxes, or for anyone to keep something, they know does not belong to them. Rolling Meadows has now set a bad precedent for local governments throughout the state, and it should be ashamed of this unjust result."