RTA sees headway in fight over sales tax havens

Regional Transportation Authority leaders hope a change of heart by an appliance store chain is a sign of more sales tax dollars to come.

The RTA sued the villages of Channahon and Kankakee in August, claiming the towns are acting as tax shelters for local retailers. Companies set up phony headquarters in either municipality in exchange for low tax rates and avoid paying sales taxes in the six-county area where a portion goes to the RTA, the lawsuit states.

It's a sham that is costing transit agencies like Metra, Pace and the CTA millions, RTA Chairman John S. Gates Jr. said.

This week the RTA claimed a victory, announcing that Plass Appliances had decided to stop channeling sales through Channahon and to pay taxes based on where its stores are located, which include Arlington Heights, Addison, Bloomingdale, Elmhurst, Geneva and Naperville.

Plass executives did not return calls seeking comment.

Officials with Channahon and Kankakee have dismissed the lawsuit, explaining that they are acting within the law and that the program they offer keeps businesses in Illinois.

But RTA leaders say their case is building momentum, pointing to a similar lawsuit filed Monday by Cook County.

Cook County Board President Toni Preckwinkle called the practice a kickback scheme, in which participating towns benefit from extra sales taxes and rebate a portion to cooperating businesses. Local governments that are providing police, fire and public works services to retailers lose, she said.