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 |  Subject: Extortionist RTA accuses United, American airlines of fuel-tax dodge; STFU RTA  Mon Jan 14, 2013 2:51 am | |
| The Regional Transportation Authority is moving to include Chicago's two biggest airlines in its campaign to thwart alleged efforts to evade sales taxes that cost the rail and bus agency millions of dollars annually in revenue.
According to a draft of a lawsuit expected to be filed today in Cook County Circuit Court, the RTA accuses United Airlines of “accepting” jet fuel at a strip mall in the DeKalb County city of Sycamore and avoiding higher Cook County sales taxes that help fund public transit. Sycamore also was named a defendant.
The effort, which is expected to include American Airlines once its parent, AMR Corp., emerges from bankruptcy, echoespending RTA lawsuits filed in mid-2011 against Kankakee and Channahon, south of Chicago. Like Sycamore, they have sales-tax agreements with airlines and other companies.
The RTA, which oversees Metra, Pace and the Chicago Transit Authority, said it has lost at least $96 million since 2005 as a result of a 25-year agreement between Sycamore and the airlines; the deal also has cost Cook County taxing bodies $193 million, the RTA said.
Though the airlines formally accept the fuel at their Sycamore addresses, the fuel is delivered to the companies' aircraft at Chicago's O'Hare International Airport.
United, a unit of Chicago-based United Continental Holdings Inc., said the accusations are "without merit." In a statement, the airline said: "The operation of our fuel subsidiary in Sycamore has been examined by tax authorities in the past and has been determined to comply with all applicable laws. Accordingly, we will vigorously defend ourselves against any such claims."
Sycamore officials did not return phone calls.
The RTA said American accepts fuel deliveries in a windowless office in Sycamore's city hall. An American spokeswoman said: “What American is doing is permitted under Illinois law. Additionally, airlines in Chicago pay the five-cent-a-gallon fuel tax imposed by the city of Chicago.”
Besides saving the differential between Chicago's 9.5 percent sales tax rate and Sycamore's 8 percent, the airlines receive a combined rebate of nearly $14 million annually from Sycamore on sales taxes collected on fuel purchases, the RTA said. Sycamore retains about $500,000 annually, according to the RTA.
United and American together account for 85 percent of traffic at O'Hare.
The RTA has estimated that it may have lost about $300 million in tax revenue between 2001 and 2011 as a result of agreements between taxpayers and Kankakee and perhaps close to that figure with Channahon's arrangement.
Overall, the RTA gets about $1 billion annually in sales tax revenue, a figure boosted 30 percent by a state match, the agency said.
While most states collect sales tax based on where products are received, Illinois collects the tax based on where a company claims a purchase was accepted. Attempts to change or clarify the statute stalled two years ago in the General Assembly.
The city of Chicago and Cook County joined the RTA in its previous lawsuits.
http://www.chicagobusiness.com/article/20130114/NEWS02/130119933/rta-accuses-united-american-airlines-of-fuel-tax-dodge
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“The state calls its own violence law, but that of the individual, crime.”-- Max Stirner
"Remember: Evil exists because good men don't kill the government officials committing it." -- Kurt Hofmann |
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