Breaking News Bar
updated: 8/22/2011 7:22 PM

RTA may announce lawsuit today ?on tax havens Tuesday

Success - Article sent! close

The Regional Transportation Authority is expected to announce a lawsuit Tuesday aimed at discouraging tax havens in Illinois.

The RTA, which has financial authority for Metra, Pace and the CTA, campaigned this spring to toughen state law to prevent companies headquartered in the metro region from moving their sales offices downstate to counties with lower taxes.

Setting up makeshift locations with just a fax machine and minimal staffing can end up diverting millions in sales tax revenues, RTA officials said. Only the six metropolitan counties contribute sales tax to the RTA.

"It would be just a whirlpool sucking revenues out of the RTA district," Chairman John S. Gates Jr. said in May.

The issue surfaced this spring after proponents of an amendment to the State Finance Act sought to allow companies more flexibility in moving their sales offices, arguing it reduced the tax burden on private enterprise.

RTA officials would not confirm details, which sources said might involve Kankakee and Channahon. A news conference is scheduled for today. Officials merely said the event would involve announcing a major initiative related to funding for mass transit.

The Illinois Department of Revenue became involved in a legal dispute with the Hartney Fuel Oil Co. in connection with the tax shelter issue in 2007. The fuel company is based in Cook County but its point of sale is in the town of Mark in low-tax Putnam County.