Durbin Urges Illinois Company to Keep Tax Address in U.S.
Says company owes large part of its success to U.S. taxpayer-funded programs
[WASHINGTON, D.C.] – U.S. Senator Dick Durbin (D-IL) today urged the President and CEO of Deerfield, Illinois-based CF Industries, Tony Will, to keep the company’s corporate tax headquarters in the U.S. rather than move it overseas – but only on paper – in order to avoid paying U.S. taxes – a process known as “inversion”.
“After benefitting from investments by U.S. taxpayers that helped make your business what it is today, CF Industries’ plans to invert and move its tax address outside the U.S. are simply wrong,” wrote Durbin. “As you consider this acquisition, I strongly urge you and the board of directors to maintain CF Industries’ headquarters and tax address here in the United States. When a company with a proud history in the United States walks away from our nation for a tax break and a temporary boost to its bottom line, one has to ask whether short-term profit is your only measure of corporate responsibility and success.”
In January, Durbin joined U.S. Senator Jack Reed (D-RI) and U.S. Representatives Sandy Levin (D-MI) and Lloyd Doggett (D-TX) to reintroduce the Stop Corporate Inversions Act of 2015 would close the corporate inversion loophole and raise nearly $34 billion over ten years. Since 2004, more than 40 U.S. corporations have inverted – many by acquiring a smaller foreign company to avoid Section 7874 of the Internal Revenue Code which Congress enacted to discourage companies moving their tax address to a foreign jurisdiction as part of an acquisition.
In May, Durbin joined Reed, Levin, Doggett U.S. Senators Sheldon Whitehouse (D-RI) and Al Franken (D-MN) and U.S. Representative Rosa DeLauro (D-CT) in introducing legislation would ban federal contracts for companies that invert and curb subcontracting to inverted corporations by allowing federal agencies to ban businesses from holding federal contracts if they subcontract with inverted corporations.
Text of letter is below.
August 11, 2015
Mr. Tony Will
President and Chief Executive Officer
CF Industries
4 Parkway North, Suite 400
Deerfield, IL 60015
Dear Mr. Will:
I am disappointed that CF Industries plans to move its headquarters to the United Kingdom as part of a deal, known as a corporate tax inversion, to acquire parts of rival fertilizer maker OCI N.V. to avoid paying U.S. taxes. I urge you to reconsider moving CF Industries tax address overseas and maintain your headquarters in the United States.
In its nearly 70-year history, CF Industries has grown from a federation of agricultural cooperatives to a global corporation employing more than 2,000 people, with sales exceeding $4 billion in 2014 alone. This multi-billion dollar deal, if successful, would make CF Industries the largest publicly traded nitrogen company in the world.
Yet, it is the people of Illinois and taxpayers across America that lose in this deal.
CF Industries owes a large part of its success to U.S. taxpayer-funded programs and services. Your workforce was trained and educated using resources from federal, state, and local governments. The transportation infrastructure on which you depend to move your products to market is financed, built, and maintained by hardworking Americans nationwide. The billions of dollars CF Industries brings in each year depend upon the robust U.S. patent protection system provided by taxpayers here in the United States, not the United Kingdom.
Furthermore, our nation’s farmers produce the world’s safest and most abundant food supply, and CF Industries has benefitted. In Illinois alone, we produce more soybeans than any other state, and we are the second largest producer of corn. Illinois producers and producers throughout the country have used your products for generations. Proliferation in applications, especially in corn production over the last decade, has allowed companies like CF Industries to increase profit margins.
After benefitting from investments by U.S. taxpayers that helped make your business what it is today, CF Industries’ plans to invert and move its tax address outside the U.S. are simply wrong.
As you consider this acquisition, I strongly urge you and the board of directors to maintain CF Industries’ headquarters and tax address here in the United States. When a company with a proud history in the United States walks away from our nation for a tax break and a temporary boost to its bottom line, one has to ask whether short-term profit is your only measure of corporate responsibility and success.
Sincerely,
Richard J. Durbin
United States Senator
Cc: Board of Directors
Stephen Furbacher, Chairman
Robert Arzbaecher
John Johnson
Anne Noonan
Theresa Wagler
William Davisson
Stephen Hagge
Robert Kuhbach
Edward Schmitt