Pursuing every possible edge to survive in the reeling U.S. airline industry, one carrier is pushing Chicago to cap its fuel tax. Elk Grove, Ill.-based UAL Corp., the parent of United Airlines, has already negotiated an incentives package with the state and Chicago to move its headquarters and about 350 employees from the suburbs to downtown Chicago. Meanwhile, the company has received assurances from politicians that they will explore a cap on the current state and city fuel taxes for the next five years. United paid the city nearly $15 million of fuel tax last year and says the combined tax on fueling its aircraft at Chicago's O'Hare or Midway airports is at or near the top in America. UAL also looked into moving its headquarters to Denver or San Francisco, cities where it has a substantial presence.
The incentives package also includes $5.3 million of city tax increment financing and $1.4 million of state infrastructure and employee-training grants.
Source: State Income Tax Monitor, 08/31/2006
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The city's offer includes $4.4 million in tax-increment financing if the airline relocates downtown, according to a source familiar with details of the plan.
The nation's second-largest carrier, a unit of UAL Corp., has been shopping for a site since spring, when it said it was looking to consolidate its facilities.