The founder of Jimmy John’s Gourmet Sandwiches said during a Sept. 18 panel discussion in Chicago that he will relocate the company’s licensing division to Florida, where he plans to move in early 2013. Mr. Liautaud said in January 2011 that he applied for residency in Florida out of anger when Gov. Pat Quinn raised the corporate tax rate to 5 percent from 3 percent.
In remarks made last week as part of a half-day conference in Chicago on how tax policies affect corporate growth, Mr. Liautaud said the Florida move was just the first part of leaving Illinois for good.
“That’s what we’re going to do to start, but I think you’ll probably see us out of Illinois in the next four years and probably see us in Indiana or Austin (Texas), if I was to guess,” he said in the video. […]
While Mr. Liautaud said a year ago that the tax rate made him consider leaving Illinois, he said last week that it was state policy that cemented the move.
“What I mind is how they spend the tax,” he said. “I would stay, but the way they spend the tax is really driving me away.”
* Back in January of 2011, after the income tax was increased, Liautaud claimed he was already in the process of moving out of Illinois…
Liautaud said he has rented a house in south Florida and his children started school there last week. He said he has applied for Florida residency and plans to commute to Champaign.
He said he doesn’t know yet whether he will put his home on West Armory Street on the market.
* But Liautaud apparently didn’t ever enroll his kids in a Florida school. At the event last week, he said this…
“My wife’s gonna stay in Champaign with the kids and we’re gonna file separate income tax returns.”
* And instead of leaving Illinois himself almost two years ago, Liautaud became a Mitt Romney delegate in Illinois. Liautaud said last week that because of his delegate status, he’ll be around until January 1, when he’ll then move to Florida.
How does one apply for residency in a state? I have never seen or heard of a residency application. It appears that the Florida corporate tax rate is 5.5% half a percent higher than Illinois. The corporate earnings must be apportioned between all the states in which that corporation does business. Talk about shooting oneself in the foot.
I remember when he opened his first subway shop behind Ikes and just a stone’s throw from the Panther Lounge at EIU. He was an interesting character then. Very committed to his business, you got to give the guy credit. I also remember sitting in the Panther Lounge one Saturday afternoon when the quiet of Charlston was disturbed by the sounds of a low flying chopper. We exited (a little bleary-eyed) to spot a Bell Ranger hovering a couple of hundred feet over Jimmy Johns. Apparently mumsy and daddy flew down to check out Junior’s restaurant. He does come from $$$ but he most certainly made his own too.
That’s a good question, especially since as far as I know (and I haven’t delved too deep) many cases were not actually tied it to JJ’s…the authorities just always target whoever carries sprouts. Do you know how many times something causes publicity, and then they later find out oops, sorry for the bad press, the real culprit was “product X”?
I would also have to point out your apparent misunderstanding of the food process, in which a restaurant (or grocery store, etc.) orders from a produce company or similar supplier, who in turn orders from someone else.
It would be kind of like blaming your local car dealer for a manufacturing problem–they should help you take care of it, but they didn’t cause it. This is a somewhat poor analogy, though, since car dealers are at least associated with the manufacturer, whereas a restaurant is just a customer buying a product.
All of that is without going into the merits of those actual cases, or the nationalization of the food production process (answer this: does E.coli even naturally occur on sprouts, and if not, where is it coming from?), but I suspect we won’t let details or facts get in the way of a politically motivated attack…
My point is that Mr. Jimmy Johns doesnt’ like how Illinois taxes are spent. I’m pretty sure the state spent a fair amount of money making sure his employees who’d been exposed to e.coli were OK and able to return to work and that the food going through his restraunt was safe.
That’s government service for you. That’s what my taxes and your taxes and his taxes go for.
If he doesn’t like the state doing it, perhaps he should set up his own labs to test the materials he buys and passes on to the consuming public.
Are you suggesting that a business has no responsibility for the materials and products it sells?
Yeah. He gave up on complaining about Illinois’ tax burdens on his business, when he found out that both Florida and Indiana (and many other states) are actually higher. Sometimes companies do get special temporary breaks for moving, or staying.
I have seen many other Republican business owners switch their complaints away from state tax burdens, when their CFO’s or accountants educated them on reality.
- Because I said so... - Friday, Sep 28, 12 @ 2:23 pm:
Good riddance! I stopped patronizing Jimmy John’s when he moaned about the amount of money Illinois spends on higher education despite the fact that he seems to make a great deal of money off college students. Hypocrite.
I also have to point out, to all these silly people making political attacks against the product (it’s really pathetic, guys) that maybe you should just voice your ACTUAL issues with what is being said and done.
I understand that for many of you libs this gives you a chance to actually rage out (a normal person can’t exactly refuse to buy any more CAT machines, or boycott a major cargo trucking company…). Instead, take a deep breath, take a hard look at the actual economics involved in a major company, and then say something intelligent about why he is wrong.
I give Paul points for attempting to do this, but since Jimmy only is moving HIMSELF to Florida, and his COMPANY to either TX, IN, or MI (only ones I’ve heard so far), he gets no points for actually landing a real comment.
Come on guys, we can do this–a rational debate about whether a company should stay in IL! Maybe I’m asking too much?
i believe Florida has no personal income tax. That is why he is moving there. It is a smart move. I think the corporate is going to be Indiana or Texas.
i have a small business (only 8 employees) and I’m thinking of moving across the border to Indiana. Looked into buying the building we are in. Property taxes on our $150,000 building are $18000 a year. That is a joke. 12%
A friend owns a 1960’s style gas station with 2 doors for car repairs in IL, $33000 a year property taxes.
First, the company did order tests on sprouts, and has actually been testing new sprouts for the past few months, including several different growing styles. So not only are they taking responsibility for their product, they are actually changing an entire production method to get a better result. That, of course, doesn’t make it into the press.
Second, no one (including, AFAIK, the admittedly loud Jimmy) is stating there should be no government. That is a straw man trotted out far too often. His point, and I would agree with him on this, is that Illinois’ past and current spending priorities makes him queasy about keeping many aspects of his corporation based here.
I don’t consider “libs” name calling. You can call me a conservative, and I won’t get insulted in the slightest. I also don’t consider “liberal” insulting, and I know plenty of people who claim that just as much as I claim “conservative”.
Liandro, JJs is staying in Illinois, and will continue to pay corporate taxes (maybe — only about a third do) on the money his company makes here.
It sounds like he’s moving himself, and taking his headquarters with him for his convenience, to get out of personal income taxes. I imagine he could talk to his friend Mitt and figure out another way to reduce his personal income tax.
But that’s his business. It’s a free country. He’s not the first guy to build a business, make some money and move to a gated community in Florida. Not everyone likes scraping the windshield in March.
I’ll still buy the chow (way better than Subway). But enough with the victim-talk. He’s not a victim. He’s living large, and good for him.
Most folks work hard. The hardest job in the world is being broke. It’s very easy to achieve but very difficult to maintain in a dignified or reasonable manner.
And everyone gets some support from their community. A little luck goes a long way, too. Never underestimate a little luck. Or timing. Or being in the right place at the right time.
I think that many of the people that worship the current state leadership are going to be almighty surprised when much of the individual money starts leaving this state. When the pension mess blows up, contrary to Miller and many other talking heads, money is going to leave. Corporations may stay, but the individual money will disappear. Why stay in this rat hole and pay excessive taxes when there are many states without income taxes (they have other taxes). I understand why he hasn’t left at this time since he has children in school.
“I’m pretty sure the state spent a fair amount of money making sure his employees who’d been exposed to e.coli were OK and able to return to work and that the food going through his restaurant was safe.”
It’s all the local health departments (normally funded through property taxes and/or food safety license fees) who get to do the heavy lifting, and any fbi (food borne illness) investigations.
The IDPH Local Health Protection Grant money is almost all federal CDC pass thru money.
It’s the locals who do the serious work with food safety, not the State of Illinois. These days (Blago time going forward), they just mostly aggregate data (and attend meetings).
Speaking of “nice try”, I will gladly give the full spelling of “liberals” every time if you will tone down the outrage (which I have a very hard time believing is real) and actually make a point about the topic.
Dave: you clearly have a problem with local real estate tax, which is of course not a state tax in Illinois. Many people move their businesses between communities within Illinois for that very reason.
You might get a better deal in Indiana on total tax burden, (including all levels of government) — just do your full research with some locals where you’re looking.
My own experience with small business owners in Indiana is that they often complain about taxes being higher than what they could get in Illinois. It’s a “grass is always greener” thing, at first blush.
Not much you said I can disagree with. I’ve met Jimmy personally (I used to manage for corporate JJ’s in Ann Arbor while in college), and I have no doubt his frustration with state government eats at him and is a factor in his decision (if he makes one, heh). The main difference between him and other companies considering such things is how vocal he is about his frustrations and potential decisions. Most businessman wouldn’t do that, and that’s just his personality (for better or worse).
So JJ plans to commute to Champaign from Florida, maintain a separate home for his wife/kids, and file separate income tax. Sounds like a real fun household. And all those additional costs are still cheaper than paying income tax in Illinois? He must be pulling in some heavy bucks. Of course he never uses any road, facility, or service supported by state tax dollars because taxes are too high?
Normally raised in water, can’t really cook (and that’s the only sure fire way to eliminate e.coli), so when you use sprouts, there’s always a chance. Remember, sprouts (actually, alfalfa sprouts) are raw food, so there’s always a risk of contamination. Note that some of the same issues apply to different fruits.
Many e.coli infections of raw foods are traced back to contaminated water, which tends to be the transmission medium.
Here’s a link which provides a viewpoint from the ‘Sprout Industry’ (yes, there is a ‘Sprout Industry’) that contains so pretty useful information and is actually a fairly balanced position, and answers some of your questions.
Liandro- What State spending is JJ unhappy with? His comment is very broad and does not help explain where he believes cuts are needed. Is he unhappy with pensions, roads, education, higher education, public safety?
Actually, to be more on topic, the business-types in this state have been beating the drums on Illinois’ financial situation. What right thinking person did not think that part of that solution would involve an increase in taxes? What they really meant is solve the problem but don’t expect us to participate. EVERYBODY knew that a tax hike was going to have to be part of any solution. Now, have enough spending cuts taken place yet. Probably not. And is the tax hike likely going to be permanent. It should be unless the state wants to plummet into even worse shape. And, as others have said, the suggestion that our tax rates are out of line is laughable.
But I still think “Mr. Jimmy” is a blowhard who want to simply take his ball and stomp away from the playground.
Without clicking through your link, my understanding is also that water tends to be the transmission medium, generally tied to contamination of the water table. And if I’m to believe “Food, Inc.” it’s due to the way we raise livestock nowadays, but that goes far past my level of expertise.
Honestly, that’s the same question I have, and I don’t have time to watch the IPI click Rich has up atm. Based on what I’ve heard (hearsay warning!) he is frustrated that the debt levels haven’t been addressed, frustrated with the pension situation, and thinks there are too many opportunities for the able-bodied to free-load on Illinois’ support system. Again, that is (mostly) hearsay, and hardly a nuanced policy break-down lol.
I think you’ve hit the nail on the head. If government had any sort of track record of using tax hikes wisely, and matching it with cuts, a lot more businessmen would understand. Instead, we get tax hikes combined with no stomach for cuts, and have to watch debt climb higher on top of painful taxes. That’s when it’s not just conservatives like me crying foul.
The cynical part of me doesn’t think it matters, since voters just keep sending the same powers back to run the finances. It blows my mind that we can be run so terribly, and still pick not just the same party, but often the SAME EXACT people to lead us…but I’m drifting off-topic now.
Possibly. With my background, I can tell you all about people milking the system. I can tell you about couples the won’t get married so she can collect welfare. I can tell you about people getting military school benefits and welfare at the same time, all while refusing to back their old job on redeployment from the combat zone. I can tell you about people hunting down jobs that pay under the table so that they can continue to collect welfare. I can tell you about people who go get their nursing degree, realize that they will make too much to qualify for the same benefits, so keep lower paying job.
I could also tell you about people fighting their way up out of it…including how my family did it. I know plenty of stories going both ways.
Liandro- good points, you obviously have some first hand experiences that aggravate you. Wouldn’t JJ serve the debate much better if he addressed similar issues, rather than taking such a wide brushstroke at our entire State. Most of us do not plan to leave. We are Illinoisans and proud to be. Let’s work through our differences rather than threaten to take our ball and play in another backyard.
What exactly is this “welfare” that everyone keeps referring to? It’s been a few years since I worked in a related area, but at the state level the concept of no-strings-attached cash benefits has pretty much been inoperative since about 1996. If you want to receive something that approximates the aid formerly available (TANF) be prepared to have a DHS caseworker getting up in your grill about work requirements and more. It’s not a free lunch. Maybe people are exercised about folks getting food stamps (which strikes me as exceptionally cruel in the current environment) or federal SSI benefits (sub- poverty level assistance to the disabled). But neither comes from the State of Illinois or is set by state policy.
Sure, you can find lazy people freeloading off the system, just as you can find cranky rich guy CEOs channeling their inner John Galt. But this mythology around welfare is just fantasy.
All of you talking about corporate taxes are way off. JJ is an LLC therefore it is a pass through entity and not affected by corporate tax rates. IL increaseing its incomes taxes 66% is where JJ and the other owners loose there money. Know which laws affect which business before you try to debate.
Don’t you think that certain of your stories might point to a problem with wages, just as much as a problem with the welfare system?
Although I do agree somewhat with the wackiness of things. I know somebody who is on SNAP. They work and are a divorced single mom. They are truly needy and aren’t taking advantage of the system. They just recently interviewed for a job so they declined SNAP in case they get the job b/c they didn’t want to worry about any potential pay back scenarios. If the job doesn’t come through this person will have to also go on Medicaid b/c they are now having a few health issues. You know what? If you go on Medicaid they increase your SNAP benefits. And they also told her if she also signed up for LIHEAP her SNAP benefit would increase even more? What the??
Here’s my problem with Mr. Jimmy. He gets his start in this state and seems to intend to continue to suck as much money as he can from the people of this state, yet when somthing dosn’t go his way he is outta here. Plenty of places to get a good sub, I won’t be going to his.