Channahon Village President Calls Sales Tax Lawsuit "Incestuous," "Political"
Village President Joe Cook said Channahon has yet to be served, but he has read the suit.
Although Channahon Village President Joe Cook said the village has not yet been served with a lawsuit from the Regional Transportation Authority, he has read the suit and thinks the motive is political.
“It’s all incestuous and very political,” he said. “They decided to pick on what they saw as the weakest link.”
He said the village will vigorously defend itself, and maintains that what the village is doing is totally legal.
“We feel like David fighting Goliath but we need to fight it on behalf of our residents,” he said.
At the heart of the suit filed by the RTA and further litigation being threatened by the city of Chicago is a sales tax loophole that allows Chicago businesses to route sales through areas with lower sales tax.
At 7.25 percent, Channahon's sales tax is significantly lower than that of Chicago and other neighboring communities. Some businesses take advantage of that by establishing their point of sale in Channahon.
Chicago officials say the city's taxing bodies are losing tax revenue from businesses whose points of sale should go through Chicago.
“We would contend that even if they weren’t in Channahon, these companies are not located in the city of Chicago,” Cook said. “The city of Chicago has no standing.”
Cook says the businesses in question are Internet and catalog-based operations that are not physically based in the city of Chicago anyway.
Regardless, he says it's not up to the city or the businesses who receives the tax revenue.
“The (state's) Department of Revenue … makes that determination,” he said.
Cook said he is offended on behalf of the citizens of Channahon that the first suit filed came from the RTA. For years, he said, Channahon residents have paid motor fuel taxes without seeing any local services.
“You don’t see buses in Channahon, you don’t see trains in Channahon,” he said. “The first time we hear from the RTA is when they are going to sue us.”