Regional Transportation Authority Says Office Outside Chicago Is A Tax Dodge

United Airlines has an office in a rural community in Illinois about 70 miles from Chicago which the city's Regional Transportation Authority (RTA) says is amounts to a tax dodge that is costing the city tens of millions of dollars in sales taxes on fuel purchased by the airline.

The RTA has filed a lawsuit against the airline in an effort to recoup some of those taxes, but it will have to prove that it would be impossible for the airline to make its fuel purchases from the satellite office. The RTA claims that there is not even a computer at the office, and that it is staffed by one part-time employee. The agency says that the airline's position that it is buying its fuel from the office is "absurd."

The Associated Press reports that the city has a high burden of proof in its case. They will have to show that not only is the fuel not being purchased through the office in Sycamore, IL, but that it is being purchased through the airline's corporate headquarters in downtown Chicago. The Washington Post reports that United pays the city of Sycamore about $300,000 per year for the office space in that city. American Airlines also reportedly has an office in Sycamore City Hall where it says it purchases fuel, but the RTA said it did not pursue action against American because of its bankruptcy status.

The RTA has released a video it says was made by a consultant during a visit to the office on a weekday, only to find it closed. There is reportedly nothing on the desks or any office equipment visible in the video.

Cook County may join the lawsuit, and may take action against the municipality if they think it gave an illegal tax incentive to the airline. But Chicago courts reportedly sided with an oil company in a similar case last year.

RTA chief Jorday Matyas said the person at the Sycamore office is "not negotiating hundreds of millions of dollars in jet fuel." But United spokeswoman Megan McCarthy told the AP the operation is perfectly legal, and has withstood previous examinations by taxing authorities. "We buy fuel in Sycamore," she said.

FMI: www.rtachicago.com