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Thursday, January 20, 2011 2:39 PM


Illinois' First Tax Hike Victim: Jimmy John's Founder to Move to Florida, Corporate Headquarters May Follow


In the first of what is likely many Illinois business exoduses to come, Jimmy John's founder contemplates moving headquarters out of Illinois.

The founder of Jimmy John's said he has applied for Florida residency and may recommend that his corporate headquarters move out-of-state as a result of the Illinois tax increases enacted last week.

Jimmy John Liautaud told The News-Gazette on Tuesday that he is angry about the moves, which boosted the individual income tax from 3 percent to 5 percent and the corporate income tax from 7.3 percent to 9.5 percent.

"All they do is stick it to us," he said, adding that the Legislature and governor showed "a clear lack of understanding." "I could absorb this and adapt, but it doesn't feel good in my soul to make it happen," Liautaud said.

Champaign has been its corporate base, but Liautaud said it will not necessarily continue that way. Liautaud said he has been contacted by "multiple pro-business states" that made him feel "wanted and important."

"I enjoy being courted and the process," he said.

Once he collects information on alternative sites, he will present it to the company's board of directors and ask the board to decide.

As for himself, "my family and I are out of here," he said.

Jimmy John's employs 100 at the corporate office in Champaign and has 190 other employees who work elsewhere but come to Champaign every four weeks, Liautaud said.

Some people may not realize how many travel to Champaign-Urbana as a result of Jimmy John's being here – many of them for training. Liautaud said his business accounts for "350 motel nights a week in Champaign, 1,400 motel nights a month."

"They eat at Cheddars," get automotive service at Sullivan-Parkhill and "drink at Carlos (Nieto's) bars," he said.

Liautaud also lashed out at union protesters who demonstrated against a "low-cost" contractor his company is using to build a Jimmy John's in Urbana. That restaurant will provide 30 jobs, he said.

He said he's sick of being "pummeled."

Jimmy John's offices occupy 23,000 square feet on Fox Drive, and Liautaud said he had considered buying a 20,000-square-foot building just north of those offices. Those plans went out the window with the tax increase, he said.

He said he also planned to hire 80 more people at the executive level.

With regard to the tax increase, Liautaud criticized the way the Legislature "snuck it through" and called the procedure "sneaky."

When asked whether Illinois could do anything now to change his mind, he said "the state could say they made a mistake" and "apologize."
Marcelyn Love, a spokeswoman paid political parrot for the Illinois Department of Commerce and Economic Opportunity, said "the temporary increase in the corporate income tax will help stabilize the budget, making Illinois more attractive to businesses."

Excuse me parrot, but higher corporate tax rates will not make the state more attractive for businesses.

I expect to see businesses on the border of Wisconsin to move North and other businesses like Jimmy John's to move South. Illinois stepped over the line, pandering to public unions. It's time for businesses to respond, and one just did.

Others will follow. Unfortunately, most taxpayers are stuck. Their only recourse is to vote out every legislator who voted for these tax hikes. Let the revolution begin.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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