CME Recommits to Chicago After Receiving Tax Relief
Special session of Illinois General Assembly adjusts corporate tax laws.
Compiled by staff
Published: Dec 20, 2011
CME Group Inc. announced Friday that it will not relocate but will remain headquartered in Chicago, Ill., after the Illinois General Assembly approved and Gov. Pat Quinn signed legislation adjusting corporate tax laws to reduce CME's taxes.
In particular, the legislation, which passed with bi-partisan support, reduces taxes on CME trades to just 27.54% of electronic trades. Previously, CME was taxed on all electronic trades even though most of them are executed outside of Illinois.
CME paid $108 million in taxes in 2010 and will pay $158 million in taxes this year. The new law cuts its taxes in half.
CME said the adjustment was necessary because trading has shifted from open outcry on Chicago trading floors to electronic systems throughout the U.S. and the world and to put the organization on "equal footing" with other Illinois companies and global trading exchanges.
CME had threatened to relocate without relief and had been engaged in talks with officials in Indiana, Florida and Texas.
The law also applies to Sears Holdings Corp. by giving it $15 million per year in tax credits for 10 years and other relief. Sears had threatened to relocate its headquarters outside the state.
CME operates the Chicago Mercantile Exchange, Chicago Board of Trade and New York Mercantile Exchange and has made Chicago the global hub of risk management.
Source: Feedstuffs
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