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Tuesday, January 15, 2013

Chicago RTA Files Lawsuit Against United Airlines

The Chicago Regional Transportation Authority (RTA) filed a lawsuit Monday in the Circuit Court of Cook County claiming that United Airlines is operating a “sham” office in Sycamore, Ill. to avoid paying higher taxes at its offices located in Chicago.

RTA is accusing American Airlines of engaging in similar activity, but has deferred action against them because the carrier is currently involved in bankruptcy proceedings. In a statement issued Monday, RTA said United and American have “small, part-time offices” in Sycamore but that the offices are rarely occupied and “don’t even have a computer.”

The agency said that the two airlines falsely claim to use the offices to purchase jet fuel. RTA believes that in actuality both carriers purchase jet fuel out of their Chicago offices. The sales tax rate in Sycamore is eight percent, versus the 9.5 percent rate that applies to businesses in Chicago.

According to a statement, the two airlines’ “sham offices” have deprived Chicago and Cook County taxpayers and public transportation agencies of nearly $300 million over the past seven years.

“These airlines happily accept taxpayer-supported services – like the mass transit that many of their customers and employees use – but don’t pay what is due to support those services. That is just wrong,” said Joe Costello, executive director of the Chicago Regional Transportation Authority.

Both carriers have 25-year leasing agreements at their offices in Sycamore.

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