NEW YORK (Reuters) - Chicago exchange operator CME Group Inc (CME.O) will decide “shortly” whether or not to keep its headquarters in Illinois, where it has a disproportionate tax burden, its executive chairman said on Thursday.
Terrence Duffy said other U.S. states are seeking to attract the parent of the Chicago Mercantile Exchange and the Chicago Board of Trade. He said he expects to have these states’ proposals in hand in two weeks.
“We are definitely working and seeking proposals actively from other states, and they’re seeking us,” Duffy said in an interview at CME’s third main futures trading venue, the New York Mercantile Exchange.
“We’re going to have a decision that needs to be made.”
CME and other Illinois-bases businesses condemned the state in January when it raised the corporate tax rate to 7 percent, from 4.8 percent. That will boost CME’s state corporate taxes by about $50 million, to a total of $200 million per year.
Duffy raised the stakes at a company shareholder meeting in June, threatening to leave the state in which the CBOT was founded back in 1848. Then in July, CME Chief Executive Craig Donohue called the tax situation “untenable” and said the company was talking to Texas, Florida and Tennessee about relocation.
“It’s coming to a head,” Duffy said on Thursday, adding CME is also talking to Illinois about the tax situation.
CME now pays the highest corporate taxes of any corporation in Illinois, Duffy said.
“If the CME Group can save a significant amount of money being headquartered somewhere else then I have to definitely investigate that, and that’s what I’ve been doing.”
Companies such as Sears Holdings Corp (SHLD.O) and Caterpillar Inc (CAT.N) have recently negotiated with the state on taxes, jobs, or possible relocation, with some winning concessions from Governor Pat Quinn.
Reporting by Jonathan Spicer; Editing by Gary Hill