SYCAMORE – Recently released documents show the Regional Transportation Authority will receive $9 million from America’s two largest airlines through a pair of settlements in lawsuits that allege they operated “sham offices” in Sycamore to avoid Cook County sales taxes.
Sycamore City Manager Brian Gregory said the city, which also was a defendant in the RTA’s lawsuits, is paying the legal fees it incurred using the sales tax distributive fund, which is where the revenues from the airline agreements are deposited.
Under terms of a settlement reached in August, American Aviation Supply, an American Airlines subsidiary company that had an office in the Sycamore Center on 308 N. Main St., must pay RTA $4.5 million. The airline also agreed to discontinue fuel sales from Sycamore on July 31 as part of the settlement.
Under the terms of the settlement, the company now must take the steps to begin collecting use taxes on jet fuel sales at Illinois airports within the RTA’s jurisdiction, including O’Hare International Airport. If American Airlines reverts to sourcing jet fuel sales to Sycamore, it must pay the RTA 1.25 percent of the total of all such sales.
Gregory had said that the fuel sales brought in $450,000 a year to the city, which primarily was used to fund capital projects.
The city also sent millions in sales tax rebates to American Airlines each year.
United Aviation Fuels Corp., the United Airlines subsidiary company, also must pay $4.5 million to RTA.
United also has a sales office in Sycamore, and the office will remain open after the settlement.
A similar settlement had been reached earlier this year regarding a PetroLiance oil and fuel distributor sales office in Genoa. The city was required to pay a $25,000 settlement to the RTA.
RTA sued several companies and municipalities in 2014 claiming that sham offices had been set up outside the agency’s taxing authority to dodge sales tax contributions.