SYCAMORE -- Is the City of Sycamore a party to a tax avoidance scam? That's what Chicago's Regional Transit Authority is alleging in a lawsuit against United Airlines. At issue is the airline's fuel purchasing division, 'United Avaition Fuels Corporation' based in Sycamore. The corporation reportedly buys all the fuel for United Aircraft operations at Chicago's O'Hare airport, and the RTA alleges those purchases happen at United's headquarters in Chicago, not the office in Sycamore, and that the Sycamore office was created for the sole purpose of avoiding Chicago's higher retail tax rate.
The lawsuit states, "sales that take place in Chicago are currently subject to an overalltax of 9.5% (6.25% state tax, 1.0% Cook County tax, 1.0 % RTA tax, and 1.25% Chicago tax).However, sales that take place in Sycamore are currently subject to an overall tax of 8.0% (6.25%state tax, and 1.75% Sycamore tax)." The suit further states that the airline receives kickbacks from the city of Sycamore which lower its tax costs even more.
The RTF suit includes pictures of the office in question, alleging there is no reasonable way United could make deals to purchase millions of gallons of jet fuel out of a single office they allege is manned part-time by one person and doesn't even have a computer. As a result, Sycamore gets tax revenue of at least $300,000 per year to which the RTA claims it is not entitled.
You can read the entire complaint here through the DeKalb Daily Chronicle: