Illinois House passes CME, Sears tax breaks

Reuters News
|
Posted: Dec 12, 2011 3:58 PM
Illinois House passes CME, Sears tax breaks

(Reuters) - The Illinois House on Monday passed a package of tax breaks for CME Group Inc and Sears Holdings Corp, sending the measure to the Senate for a final vote.

The legislation would give the CME an $85 million tax break from the state of Illinois, as lawmakers seek to keep the biggest U.S. futures exchange operator from leaving Chicago, its long-time home.

The bill, which was passed in an 81-28 vote, also extends a $15 million yearly tax break to retail company Sears.

The Illinois Senate, which passed similar legislation earlier this year, is due to consider the bill on Tuesday. Illinois Governor Pat Quinn has said he would sign the bill into law if it passes both bodies.

CME, which employs 2,000 people in the state, and Sears, which employs about 6,000, had threatened to leave Illinois after the cash-strapped state in January raised corporate tax rates to 7 percent from 4.8 percent, along with individual rates.

The bill allows CME to count just 27.5 percent of its transactions as Illinois revenue, exempting the majority from state taxes.

CME said the new regime is more fair because it recognizes that most of the 13.2 million contracts that change hands daily at its three exchanges are bought and sold by out-of-state, and in some cases out-of-country, traders.

(Reporting by Ann Saphir with additional reporting by Karen Pierog in Chicago; Editing by Dan Grebler)