RTA claims American Airlines dodges taxes with Sycamore fuel - MyFoxAustin.com | KTBC Fox 7 | News, Weather, Sports

RTA claims American Airlines dodges taxes with Sycamore fuel supplier

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CHICAGO (Sun-Times Media Wire) -

The Regional Transportation Authority is suing American Airlines and one of its fuel suppliers in Sycamore, saying the airline has maintained a fuel sales scheme through the north central Illinois city to avoid paying millions in local use taxes.

The lawsuit was filed Tuesday in Cook County Circuit Court. It claims that the Texas-based airline, one of the largest bulk fuel buyers in the world, falsely reports millions of dollars worth of transactions with American Aviation Supply, which allegedly operates in Sycamore "via one or two employees" in a 750-square-foot office to avoid paying taxes for their operations at O'Hare International Airport.

American Airlines spokeswoman Mary Frances Fagan rejected the RTA's allegations.

"We believe that we are still paying the proper amount of retailer's occupation tax and that we are in compliance with the law," Fagan said in an email Wednesday.

The RTA claims that while the Sycamore supply office is more than 50 miles away from O'Hare, it is just five miles outside the transit agency's taxing jurisdiction, alleging American Aviation Supply "conducts its actual selling activity elsewhere." The suit does not specify where they think the sales actually take place, only that it is near O'Hare and within the RTA's taxing jurisdiction.

By reporting fuel sales through the Sycamore office, the RTA claims it is being cheated out of the 1.25 percent share of sales tax revenue it should be receiving through jet fuel sales, the suit says.

The suit also names the city of Sycamore, which returns much of the sales taxes it receives from American Aviation Supply as part of an incentive agreement, the RTA claims.

Representatives for American Aviation Supply and the city of Sycamore could not immediately be reached for comment Wednesday evening.

The two-count suit seeks either an unspecified amount in back taxes from American Airlines, or a share of sales taxes that Sycamore has received on jet fuel sales from American Aviation Supply.

--Contact: Atty. Gino L. DiVito, (312) 762-9450 or Atty. Timothy L. Bertschy, (312) 853-8710.

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