The Illinois Supreme Court has struck down a state rules that let businesses get out of paying local taxes. Some of the biggest companies in the state have been linked to the practice. Retail companies like being near Chicago - big cities offer an educated workforce and high quality of life. With that also comes high taxes. A number of firms with headquarters in Chicagoland have opened smaller sales offices elsewhere in Illinois, towns were taxes are low or non-existent. At the Hartney Fuel Oil Co., the sales office basically consisted of a fax machine in Mark, Illinois, about 100 miles from the company's headquarters in Forest View, west of Chicago. Instead of paying high local taxes, Hartney paid nothing. The state eventually objected, and forced Hartney to pay more than $23 million in back taxes. Which leads us to the present case. The Illinois Supreme Court says the practice of taxing only on where a sale takes place is not consistent with state law. That's likely to mean bigger tax bills for Chicago-based companies in the future. But the court also said the companny should get its money back because it was complying with flawed rules.
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