Tags: tax | American | fuel | Chicago

American Airlines Sued by Illinois Agency Over Jet Fuel Tax

Wednesday, 12 Mar 2014 11:43 AM

American Airlines Group Inc., the world’s largest air carrier, was sued by the Chicago-area Regional Transportation Authority for allegedly evading Illinois sales taxes on jet fuel.

American sells fuel through its American Aviation Supply unit for use in planes at O’Hare International Airport and other local airfields, while improperly reporting the city of Sycamore, Illinois, about 50 miles away, as the sales point, according to a complaint filed yesterday in Cook County Circuit Court.

Sycamore and the American unit have an agreement under which Sycamore returns almost all of the sales tax it collects to the company, RTA said in a statement today. The Fort Worth, Texas-based airline reports the fuel sales at Sycamore “in an attempt to avoid paying millions of dollars in Illinois sales taxes,” RTA said in the complaint, which seeks restitution.

The “unlawful scheme” cost Chicago and Cook County an estimated $15.3 million last year, the RTA said in the statement.

“We believe that we are still paying the proper amount of retailer’s occupation tax and that we are in compliance with the law,” Mary Frances Fagan, an airline spokeswoman, said in an e- mail.

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