Airlines Accused of Having "Sham" Offices to Avoid Sales Taxes in Chicago

Lawsuit filed


Chicago's Regional Transportation Authority is accusing United Airlines and American Airlines of operating "sham offices" in a suburban Illinois town and "dodging" millions of dollars in state sales taxes.

The Regional Transportation Authority (RTA), which helps fund bus and train systems in six counties, said the airlines are avoiding paying a higher 9.5 percent sales tax from their actual offices in Chicago and instead using "sham offices" in Sycamore, Ill., about 63 miles west of Chicago, thereby paying 8 percent in taxes.

Illinois collects sales tax based on where a company claims a purchase was "accepted."

RTA estimates that it has lost $96 million since 2005.