Citizens State Bank v. Johnson

Plaintiff, Citizens State Bank of Mount Morris, brought a complaint for an injunction against J. Thomas Johnson, Director of the Illinois Department of Revenue (the Department), and James H. Donnewald, Treasurer of the State of Illinois (the Treasurer). Plaintiff argued that the Department had improperly disallowed certain deductions of interest income on plaintiff’s 1979 and 1980 tax returns. The bank contends that under section 203 of the Illinois Income Tax Act (Ill. Rev. Stat. 1981, ch. 120, par. 2—203), the interest it earned on certain investments was exempt from State taxation at the…