Chicago sues over tax-avoidance efforts

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CHICAGO (AP) — The city of Chicago is suing two northeastern Illinois communities over tax-incentive programs that divert sales tax revenues from the city.

CHICAGO (AP) — The city of Chicago is suing two northeastern Illinois communities over tax-incentive programs that divert sales tax revenues from the city.

Chicago joined the Regional Transportation Authority Tuesday in suing Kankakee and Channahon. The lawsuits follow a story in the Chicago Tribune that reported dozens of businesses in the Chicago area are moving purchases through satellite locations in outlying towns to gain a sales-tax advantage over their competitors.

Chicago Mayor Rahm Emmanuel says the companies are cheating Chicago’s taxpayers. The lawsuit was filed in Circuit Court of Cook County.

The Tribune reported Sunday that catalog houses, appliance retailers and other companies have set up offices in places such as Kankakee and Channahon, which have lower sales taxes than Chicago.

Kankakee and Channahon officials say they’ve followed state regulations.

Copyright 2011 The Associated Press.

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