RTA names Target, Aldi among firms examined in tax suit
BY ROSALIND ROSSI Transportation Reporter April 17, 2013 9:24AM
Updated: April 17, 2013 8:06PM
Target, Aldi, Lands’ End and Gateway are among some 70 companies RTA officials on Wednesday said have been occupying offices in Kankakee or Channahon, possibly to avoid paying higher sales taxes.
The RTA filed suit over the alleged tax-dodge scheme in 2011, but Wednesday marked the first time it released a raft of company names. The transit agency is trying to decide if those companies should be named as defendants in the RTA suit, one RTA offical said.
The agency contends companies have been claiming their sales are sourced through “sham” offices set up in Kankakee and Channahon so they can be taxed at a lower rate than if they used their actual offices in the six-county RTA region. RTA officials say the scheme has resulted in the loss of more than $100 million in tax revenue.
Among the companies RTA said Wednesday had offices in Kankakee were Target Corp., with 97 stores in Illinois; Aldi Investments, with more than 1,000 stores in 31 states; Lands’ End, which offers clothing and other products through multiple channels; technology company Gateway; and AT&T Network Procurement, a subsidiary of AT&T, the nation’s largest telecommunications company. At least seven of the offices were located above a cash-for-gold and a hair-braiding store, RTA officials said.
Companies the RTA identified as having offices in Channahon were Southwest Jet Fuel Co, which operates more than 3,200 flights a day; Verizon Wireless Network Procurement, a subsidiary of Verizon Wireless, and WESCO Distribution Inc., a Fortune 500 holding company.
The company names were discovered through Freedom of Information Act requests, filings with the state and court filings outside Cook County, the RTA said.
Also Wednesday, RTA officials said the number of disabled residents issued “free-ride” permits has risen dramatically since the state’s Circuit Breaker program ended Jan. 1 and processing of such applications converted to an all-online process. RTA Chief of Staff Jordan Matyas questioned if “proper safeguards” were in place after the number of free-ride disabled permits more than doubled this March compared to last March.
However, an Illinois Department of Aging spokeswoman said the agency is “confident” of its automated procedures, which she said include verification of age, income and disability.