United, American Airlines Accused of Tax Avoidance
American Airlines “accepts” its fuel for its O’Hare International Airport operation in Sycamore, Illinois, a town 60 miles west of Chicago. (Photo: American Airlines)
American Airlines “accepts” its fuel for its O’Hare International Airport operation in Sycamore, Illinois, a town 60 miles west of Chicago. (Photo: American Airlines)

The Regional Transportation Authority (RTA) for Chicago and its surrounding region has publicly charged United Airlines and American Airlines with running “sham” business operations conceived to circumvent city and RTA sales taxes. In a lawsuit filed against United last week, the RTA–a municipal corporation of government that oversees the Chicago area’s public transportation departments–claimed that the airline established shell offices in the town of Sycamore, Illinois, where it pays a total tax rate of 8 percent. According to the RTA, both United and American operate rarely occupied offices in Sycamore for the explicit purpose of claiming to buy their jet fuel in the town, thereby saving 1.5 percent in sales taxes and depriving Chicago and Cook County taxpayers of nearly $300 million over the last seven years.