Jimmy John’s Considers Leaving Illinois

CHICAGO (CBS) – It’s been a rough couple of months for sandwich maker Jimmy John’s. First a salmonella outbreak forced them to get rid of their alfalfa sprouts. Now Illinois’ increased corporate income tax is forcing the company to consider leaving the state. CBS 2’s Kristyn Hartman reports.

The gourmet sandwich guru isn’t exactly in an Illinois state of mind these days.

Jimmy John’s founder, Jimmy John Liautaud said, “It’s a real bummer because I love it here.”

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But his lack of love for the increased corporate income tax seems to be taking its toll. Now, Liautaud is thinking of moving his Champaign-based headquarters out of the Land of Lincoln.

Liautaud said, “The more they chisel away at what we make, the less compelling it is to stay up at four in the morning doing it.”

Here’s the math: Before the corporate hike, Liautaud was taxed about $7 for every hundred he made. Now it’ll be about $9.50.

“It’s irresponsible financially,” he said.

In the event of a corporate move, you’d still be able to get “subs so fast you’ll freak” at local stores. If you’re wondering what the big deal is then, the CEO of the Illinois Chamber of Commerce explained the trickle down.

“These workers are using local services, they’re going to small businesses, they’re buying homes,” and said Doug Whitley, if the 100 or so corporate employees leave with Liautaud, they take all that wherever they go.

“I’m being courted by lots and lots of places, and people, and the Governor of Indiana,” said Liautaud.

“This action, or even discussion of it by Jimmy John’s, really throws a bucket of cold water on all the politicians who think they can do anything, and the business community will just absorb it,” said Whitley.

We asked Illinois Governor Pat Quinn about it.

“Our state created more jobs than any other state in the Midwest last year, “ said Quinn, “We wanna keep Jimmy John’s here. It’s his choice.”

Quinn also pointed out Jimmy John’s franchises still have to pay taxes. Keep in mind, though, this would be a headquarters move at a time when Liautaud is looking to expand by more than 70 corporate employees.

The Illinois Chamber of Commerce says any loss of jobs just adds to the hundreds of thousands of employees the state lost in the last decade.

  • James Cady

    Well, the outfit I work for is smaller than jimmy John’s, but my boss already put out a memo saying that as soon as the quarter closes we’ll be looking at moving to Indiana. Once again, Illinois lawmakers shoot the state in the foot. Why do we keep electing them?

  • potbellyrulez

    go to indiana. we prefer potbelly anyway. by the way, even with the tax hike, indiana still has a higher income tax moron..

    • Roberta Waker

      Why the insults and name calling? You need to go to school to learn punctuation and the basic rule of capital letters for the start of each sentence. Jimmy Johns will be the first of MANY leaving Illinois because of the tax hike. They may have a higher income tax, but overall taxes are less in Indiana, Wisconsin AND Iowa.

      • Soda Bob Curtis

        I’m sorry, Illinois’ new rate is 5%.

      • Soda Bob Curtis

        Incorrect. Indiana’s income tax is 3.4%, Illinois’ is now 5.25%. Nice try, though.

      • jspukman

        Soda Bob…IL has the highest tax rate in the US. Yes the income tax is lower but you forgot to add in every other tax. Property tax, sales tax, etc.

        I get it. You like to vote party line Democrat regardless of who is running. But now we are going to see the results of that kind of mentality. The reality is that many people in IL will lose their jobs. The reality is that many businesses will move at least some of their operations outside of the state.

      • j31

        I think you may need to do more research on where IL ranks in taxes, except for cook county sales tax, we are not the highest in any state taxes, Income tax is lower then several states, our property taxes are now where near CA or NY. They may be higher then other states in the mid-west, but you said everyother state. So please re-do your research.

  • Chuck

    Nicely done, Mr. Governor. Harold Washington was right about you.

  • jon

    jimmy john’s a gourmet sandwich shop? ha! are you freaking kidding me? anyway, who cares if this dude leaves? sure fewer jobs here is a drag, but this will just mean more jobs wherever he moves to. i hope his minneapolis shops go union (after there were apparent illegalities he and/or other owners committed in trying to deny unions the right to organize).

    • Soda Bob Curtis

      There is certainly a right to organize. But a business owner has every right to employ whomever they please.

    • You're right

      Unions are the answer to all problems!!! NOT !!!!!!!!

    • E F Hutton

      Yeah, unions. That way they can force wages and benefits to increase along with the taxes. Brilliant. Businesses with labor unions run at an average of 10% less efficient with 10% higher operating costs than their non-union counterparts.

  • dean

    Gwee w the flea?

  • FillB

    If the media are going to keep repeating this sensationalist claptrap, at least report that Jimmy John’s comments are as much motivated by politics as anything else. In the last cycle alone, Mr. Liautaud gave about $300,000 to GOP candidates, including $110,000 to gubernatorial loser Bill Brady.

    He’s not making an economic statement, he’s making a political one.

    • jspukman

      Well you can’t blame him for giving money to the GOP. They are the ones trying to actually help and protect people. A ton of IL jobs will be lost because of this ridiculous tax bill. Not to mention the end result will be lower tax revenue for the state.

    • ALLAN

      All of you who voted for Quinn got what you deserve: A front man for Chicago political thugs who’ve co-opted the state government and its taxing power to line their and their relatives’ pockets. That includes Daley, Madigan, and Cullerton, and guess what, they don’t practice ethnic diversity in government either, do they?

    • alfredog4

      Let’s boycott all companies that threaten to leave illinois. They go away and still want us to buy their products? I say heck NO.

      • E F Hutton

        Idiot. Boycott the politicians that create tax structures and regulations that drive businesses away. Stop voting for Dummycrats and Republicants. Try running your own business for a while before you blame business owners. People like you are how we ended up in this mess.

  • kels

    no, not my jimmy johns! i love that food! and man, they deliver soooo fast, it’s amazing, they are always here in like 20 minutes. beats a pizza any day!

    • Soda Bob Curtis

      Restaurants won’t leave, just the corporate headquarters.

  • Biggpapa

    Whatever tax breaks Pres. Obama gives us this year, Gov. Quinn takes it away from the people of Illinois. I say lets get rid of Quinn like we did to Blago.

  • Jim

    You will see many others leave. Illinois unemployment will hit 12% this year thanks to Quinn and his pay to play model. Recall Quinn!!!

    • E F Hutton

      It will be higher. The cost of all goods and services just increased. What people fail to realize is that businesses don’t pay taxes. Politicians try to con you into supporting corporate tax increases because you think it’s only those evil greedy wealthy business owners that have to pay. Taxes are a cost of doing business like any other, payroll, raw materials, utilities, etc. All of those costs are rolled into the price of the final product or service. Then along comes a new tax increase. The business either has to make cuts somewhere, increase prices, or a little of each. Whatever they do it isn’t good for business and in turn isn’t good for employment. A business owner friend of mine just gave himself his 3rd pay cut in 2 years and raised prices. He can’t cut anymore personnel and salaries are already at the bottom. He’s not rich. He struggles with the mortgage and buying fuel like anyone else. The next step is to close.

  • Tim Jones

    Hopefully soon many large companies will threaten to move and the morons in Springfield will eliminate the tax hike. For now, lets recall Quinn. There is a way to do it now.

  • Mr Voter

    Re-Call the slob Quinn, he makes the last two crooks look smart…can’t wait till the feds drag him off to the pokie….
    RE-Call Quinn……
    IL. Land of Corruption………

  • Early Ardmore

    “The last official act of any government is to loot the treasury.” ~ George Washington


  • Enough is Enough

    I cannot blame you. Too bad on possible loss of jobs in Illinois. You already moved to Florida. If you wouldn’t have you would have had an increase of 2% on the personal income tax and a 2.2% increase on your business. That would have been 4.2% increase in taxes. Possibly a good reason for other Illinois residents owning their own businesses to move. Also, did you know if those businesses had operating net losses from previous years they are not allowed to deduct them until year 2015. Other individual living in states that did not increase their taxes are getting 2% more in their paycheck because the federal reduced their FICA tax. Interesting it does not affect Illinois government employees because they are not part of the Social Security System. So a typical IL taxpayer would have been getting 2% more in their paychecks for 2011 instead the state is taking it away. Wait until 2012 when the IL tax payers see a reduction in their pay by 2%! Move and make a stand!

  • Puzzeled

    I really think things are going to get worse here. I talked to a man that owns a large company several years ago and he said if Illinois tries to squeeze any more money out of his company he is going to move it over the border into Indiana. He didn’t sound like he was joking. What good is a tax increase if it ends up bringing in less money in the long run? Plus they will have to pay unemployment to people that lost their job. It’s a lose-lose situation.

    • alfredog4

      Let’s boycott every company that leaves Illinois. They leave but they still want us to buy their prodicts? Heck no.

  • Roberta Waker

    We need to recall Quinn. Isn’t there a petition on a website setting up the process to recall him? Yes, those that voted for this tax increase will find it a very bitter, but temporary “victory”

    • Cindy Heck

      If there is let us know.

  • Peter Weger

    Good ridance. Your sandwiches stink so go all ready and don’t let the door hit you on the way out.

    • alfredog4

      You’re right, let’s boycott them anyway.

  • Greywolf445

    As long as idiots keep electing idiots that spend money they dont have and do things like idiots notihing is going to change–anyone that THINKS the tax hike is temporary is an idiot

  • franklin808

    Oh come on, this tax is not that much. I will proudly pay additional taxes to ensure gold-plated pensions for state employees. I make so much money that my retirement is guaranteed, others should get theirs too.

  • Mr. Justice

    Folks, this is just the beginning. More companies will be moving their corporate offices to Indiana, Iowa, or Wisconsin. This is what happens when politicians want to increase taxes and not make the appropriate cuts. In my opinion, do a 50% cut on all welfare recipients. IF businesses cannot grow in Illinois, they will move out of state. Case in point, many trucking firms moved out of Illinois about 6 to 8 years ago due to the additional taxes levied on IL trucking companies.

  • gm

    I’m in my 24th year of employment with the same company- solely because of Quinn and his lame duck cronies – 84 people, including my self will be out of a job on April 1st.

  • Cindy Heck

    If there is let us all know. Thanks

  • alfredog4

    If they leave Illinois let’s boycott them, we have enough sandwich chains to fill the vacuum and create new jobs. Let them go.

    • E F Hutton

      You are such a moron. This isn’t about sandwiches. Fine, you don’t like Jimmy Johns. They are not the first and won’t be the last business to leave Illinois. A personal friend of mine is considering closing his pizzeria after 37 years. Dozens of businesses have already left. More will follow, everything from local shoe repair to large manufacturing. I can only hope you lose your job too. Maybe then you’ll have some idea about how things work.

  • Nancy A. Fallen

    I love Jimmy John’s vegie subs, but management has really gone down hill throughout their franchises, specifically Barrington and Irving Park Road in Hanover Park (poor hygiene), and Arlington Heights and Biesterfield in Elk Grove Village (poor hygiene, terrible service and loud obnoxious music). However, Roselle and Golf in Schaumburg has always been great and they’re always friendly and courteous. It will be huge loss for them to leave for both customers and owners, but they need to clean up their act.

  • Opinions

    Some of the people posting on here are very ignorant. Okay, we get it you don’t like JJ, that’s not what this topic is about though. It’s about the fact that many other companies will leave IL. It’s gone be kind of like a “domino” effect. As companies leave unemployment will go up… Ahhh you have got to love Quinn lol

  • http://webvagrant.com/2011/01/24/sowel/ Thomas Sowell Pimps His Book, Talks About Bankruptcy « The Web Vagrant

    […] individuals and corporations.  These moves were just announced, yet already Jimmy John’s is considering leaving the state, Amazon is considering ending its affiliate program with Illinois vendors, and pundits are joking […]

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