RTA sues over tax-avoidance efforts (Chicago)

Bloomsberg Businessweek ^ | August 23, 2011 | Staff

[triumphant values]

The Regional Transportation Authority and city of Chicago filed lawsuits Tuesday against two northeastern Illinois communities, alleging the entities are owed millions in lost revenue because the towns engage in tax-incentive programs that divert sales tax revenues.

The lawsuits against Kankakee and Channahon came after the Chicago Tribune reported that dozens of businesses in the Chicago area are moving purchases through satellite locations in outlying towns to gain a sales-tax advantage over their competitors.

RTA's executive director Joe Costello said the RTA system -- which oversees three Chicago area mass transit agencies -- relies on sales tax revenue for almost half of its funding. According to the lawsuit, RTA is allegedly owed at least $100 million in lost revenue.

"It is this funding that keeps our trains and buses running and in good repair," Costello said in a statement. "We believe that these illegal tax avoidance scams are costing our riders tens of millions in lost revenues every year."

The Tribune reported Sunday that catalog houses, appliance retailers and other companies have set up offices in places such as Kankakee and Channahon, which have lower sales taxes than Chicago. The retailers can charge customers a lower price, gaining a competitive advantage and offering a windfall to the host cities.

[triumphant values]

Three days from the Tribune's story to the filing of a lawsuit. When it comes to theft the government can move quicker than anything.

[Lazamataz]

So now it is illegal to shop anywhere in Illinois but Chicago.

Nuke this effing hellhole. Do America a favor.

[businessprofessor]

These cities are not breaking any laws. I am not sure how Chicago will prevail in this lawsuit. Some states have laws about zip code based taxation in which the tax is based on the zip code of the customer. This policy is practical for only large items such as autos. If the lawsuit is successful, the next step is just to ban businesses from relocating.

[geezerwheezer]

That giant sucking sound you hear is the cesspool called Chicago. The little towns should tell ‘em to go suck an egg!!

[Eagle of Liberty]

If the lawsuit is successful, the next step is just to ban businesses from relocating.

Or just ban businesses from making a profit. Obama and Emanuel are just Enemies of the businessman. They attack the everyday business at every turn. They make it nearly impossible to grow a business and then people wonder why unemployment is stuck at current rates.

[Myrddin]

I've watched a few customers at El Cajon Harley discussing the sales tax on their purchase. It is based on their home address, not the location of the dealership. That raises an interesting issue if I ever choose to make a purchase there. My home address is in Idaho. When I purchased a bike in Chula Vista, I was assessed sales tax for Chula Vista. I had the MCOA (initial title from the manufacturer) sent FedEx to Idaho so my wife could register the title in Idaho and tranfer my existing plate to the new bike. All complete in 2 days (thanks FedEx).

I don't think the cities are breaking any laws. If there is a state statute that requires sales tax by home address, then the merchants doing the sales are the parties responsible for the transaction.

[sten]

"It is this funding that keeps our trains and buses running and in good repair," Costello said in a statement. "We believe that these illegal tax avoidance scams are costing our riders tens of millions in lost revenues every year."

IOW... state taxes are used to pay for union wages as well as state, local, and union pensions.

you must be forced to give us your money to support our socialistic world view

as far as i'm concerned, these people are deliberately draining the system and should be cut from public expenses immediately. if they're so good... they can compete for their job like everyone else

[Niteranger68]

They call it Shitcago for a reason.

[Loyal Buckeye]

Tax avoidance [see tax planning] is o.k.

Tax evasion is not [see Charlie Rangel and Tim Geithner].

[arrogantsob]

There is no “theft” involved here. In fact, moving businesses to avoid high taxes is as old as taxes. This won’t get past the US Supreme Court.

[arrogantsob]

Will you still be cheering mass death when the entire state and much of the Midwest see their economies totally collapse as a result of your proposal?

Or does your “thinking” go no further than inflammatory nonsense.

[Lazamataz]

Will you still be cheering mass death when the entire state and much of the Midwest see their economies totally collapse as a result of your proposal?

Chicago, Illinois is a blight, a cancer on our national body. Does one NURTURE cancer, or does one ABLATE IT?

Jesus said to do it. You aren't going to go against JESUS, are you?

[triumphant values]

The thievery attempt I was referring to was the one done by Chicago and the RTA.

[brityank]

Sounds like a good way to save some bucks that belong to the purchaser, not cesspool Chicago.

Kankakee charges the state minimum, 6.25 percent, of which the state shares 1 percent with municipalities. Chicago's rate is 9.75 percent, meaning millions of dollars in lost revenue at a crucial economic time.

And just who created that crucial economic time???

[arrogantsob]

OK, I couldn’t see how these towns could steal companies. LOL, what a ridiculous suit. “Well, Your Honor, des guys came in and talked our sla...I mean companies to follow them out of town.”

[arrogantsob]

Wow, now THAT is some big time inflammatory. I’ll bet Slim Pickens rode it down, too.

[redgolum]

I am within 200 miles of Chicago. If you nuke it, does than mean I can FINALLY break out my Mad Max car? I had it all set, but it seems the Apocalypse hasn't come yet.