States’ Drive to Collect Taxes on Internet Sales Is a Blow to Marketers
By IAN MOUNT
NYT
On a dreary day last April, Tim Storm, the founder of FatWallet, and his 54 employees formed a convoy of some 30 cars, three moving trucks and a trailer laden with two fiberglass cows (one purple, one black), and drove five miles north from their old corporate home in Rockton, Ill.. to the new FatWallet headquarters in Beloit, Wis.
The move certainly seemed to be an odd business decision: it cost $100,000, and the company left behind a $5 million, three-year-old, custom-built office building in Rockton, whose maintenance would continue to cost $30,000 a month until it finds a tenant. But Mr. Storm felt he had to do it for his business to survive.
One of the country’s biggest bargain hunter Web sites, FatWallet publishes coupons and deals from about 1,000 companies that range from small shops like PennyWise.biz to retail giants like Amazon. Since 2005, the company has acted as the middleman in more than $1.2 billion in Internet sales. (It says its own revenue was $12 million in 2010.)
But last March, Gov. Pat Quinn of Illinois signed House Bill 3659, a so-called affiliate nexus tax that would require out-of-state retailers that advertise through Illinois-based Internet marketing “affiliates” like FatWallet to collect and remit Illinois sales tax.
(More here.)
NYT
On a dreary day last April, Tim Storm, the founder of FatWallet, and his 54 employees formed a convoy of some 30 cars, three moving trucks and a trailer laden with two fiberglass cows (one purple, one black), and drove five miles north from their old corporate home in Rockton, Ill.. to the new FatWallet headquarters in Beloit, Wis.
The move certainly seemed to be an odd business decision: it cost $100,000, and the company left behind a $5 million, three-year-old, custom-built office building in Rockton, whose maintenance would continue to cost $30,000 a month until it finds a tenant. But Mr. Storm felt he had to do it for his business to survive.
One of the country’s biggest bargain hunter Web sites, FatWallet publishes coupons and deals from about 1,000 companies that range from small shops like PennyWise.biz to retail giants like Amazon. Since 2005, the company has acted as the middleman in more than $1.2 billion in Internet sales. (It says its own revenue was $12 million in 2010.)
But last March, Gov. Pat Quinn of Illinois signed House Bill 3659, a so-called affiliate nexus tax that would require out-of-state retailers that advertise through Illinois-based Internet marketing “affiliates” like FatWallet to collect and remit Illinois sales tax.
(More here.)
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