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Rail News: Passenger Rail
8/24/2011
Rail News: Passenger Rail
RTA sues two Illinois towns for ignoring tax agreements
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Yesterday, the Regional Transportation Authority (RTA) filed a lawsuit in the Circuit Court of Cook County to collect more than $100 million in revenue that the RTA alleges was lost due to tax avoidance efforts by the municipalities of Kankakee and Channahon, Ill.
The lawsuit stems from “the utilization of tax-sharing agreements that have induced companies operating within the six-county RTA region and across the state to claim that their sales are sourced through sham offices set up in Kankakee and Channahon,” RTA officials said in a prepared statement. “Under these agreements, the two municipalities kick back almost the entire amount of their local share of the statewide sales tax to participating companies.”
The suit also alleges that the municipalities have “disregarded the Freedom of Information Act” by denying the RTA’s request for a release of the agreements, authority officials said.
The RTA relies on sales tax revenue for nearly 50 percent of its funding, said RTA Executive Director Joe Costello.
“It is this funding that keeps our trains and buses running and in good repair,” he said, adding that the tax avoidances are “costing our riders tens of millions in lost revenues every year.”
The lawsuit stems from “the utilization of tax-sharing agreements that have induced companies operating within the six-county RTA region and across the state to claim that their sales are sourced through sham offices set up in Kankakee and Channahon,” RTA officials said in a prepared statement. “Under these agreements, the two municipalities kick back almost the entire amount of their local share of the statewide sales tax to participating companies.”
The suit also alleges that the municipalities have “disregarded the Freedom of Information Act” by denying the RTA’s request for a release of the agreements, authority officials said.
The RTA relies on sales tax revenue for nearly 50 percent of its funding, said RTA Executive Director Joe Costello.
“It is this funding that keeps our trains and buses running and in good repair,” he said, adding that the tax avoidances are “costing our riders tens of millions in lost revenues every year.”
