Walgreens debates relocating to lower taxes - KMSP-TV

Walgreens debates relocating to lower taxes

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CHICAGO (FOX 32 News) -

There are 608 Walgreens stores in Illinois. Florida, Texas and California have more. However, Walgreen’s corporate address is in north suburban Deerfield, at least for now.

“Walgreens is an Illinois Company,” exclaimed William McNary of Citizen Action of Illinois, on protest video.

Protesters are opposed to Walgreens possibly changing its corporate address to a European location; maybe Switzerland. It's called a corporate inversion. It's not like Boeing moving its whole corporate headquarters to Chicago. Walgreens would just have a new legal domicile.

The company can then avoid the 35 percent corporate tax rate in the U.S., and will only have to pay about half as much abroad.

“Not only would it be a betrayal of the people of Illinois that made them rich, it would also be a drain on the taxpayers by taking four billion dollars out of our economy,” added McNary.

Morningstar's Walgreens analyst Vishnu Lekraj said CEO's are supposed to protect the bottom line, and any public backlash is unlikely to have long term consequences.

“Consumers go for the convenience most of the time, so if there is Walgreens next to them, and a CVS is a half a mile away, they will go the Walgreens, no matter where it's based, corporate-wise,” said Lekraj.

The potential action by Walgreens has gotten some attention on Capitol Hill, where one U.S. senator is calling for a moratorium on corporate inversions.

"Average taxpayers are fed up with profitable U.S. corporations using tax haven gimmicks to dodge their tax obligations," said Michigan Sen. Carl Levin.

As for Walgreens, the company told FOX 32 News, "We will do what is in the best long-term interest of our company and its shareholders."

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