FatWallet’s Move Heralds Another Loss For Illinois
FatWallet.com just announced today that it will be leaving Illinois for Wisconsin as a direct result of the recent tax legislation passed in that state last month. FatWallet made the initial announcement that it would leave if the “Amazon Tax” Bill passed in January. As of today FatWallet made it official that the company will be leaving for Wisconsin after losing many of its relationships with advertisers as a result of Governor Quinn’s ill-conceived passage of the â€œAmazon Taxâ€.
The company will be relocating to Beloit, Wisconsin as of April 8th. The company has stated that at least a dozen retailers have told FatWallet they would cut ties with them because Illinois now requires 6.25 percent tax as a way to preserve profits. FatWallet is the second large affiliate company to decide to leave Illinois following CouponCabin’s recent announcement.
FatWallet was expecting an annual loss of 4 million dollars as a result of this legislation. â€œI think there is a little bitterness,â€ Brent Shelton FatWallet spokesman told the Hearld News. â€œThe way the taxation has gone in Illinois, they are not making it a lucrative choice.â€
Attorney for FatWallet Ian Linnabary stated, â€œwhat it effectively does is make FatWallet uncompetitive.â€ He added that he believes advertisers will give their contracts to other marketers outside of Illinois. None of the bordering states have affiliate tax laws.
Illinois is the fourth state to adopt the â€œAmazon Taxâ€ law. Amazon.com also cut ties to partners in Rhode Island and North Carolina after those states enacted similar tax legislation. Illinois Revenue Department has estimated the law, which is effective as of July 1, would generate $170 million for Illinois. However such estimates overly-optimistic since many of the retailers the law is meant to target have already severed ties. Amazon cut ties immediately with Illinois affiliates after the law’s passage. Overstock and other online retailers have likewise followed suit.
Brie Callahan of Gov. Quinn’s office defensively pointed out that before Quinn signed the law; the governor established a program to connect partners with other retailers that both had a physical and online presence in the state, like Walgreens, in an attempt to keep the estimated 9,000 partners from leaving Illinois. About 150 partners have signed up for the program.
FatWallet discussed joining the program, but Shelton said the company could not afford to do it, â€œWith 30 percent of our revenue being challenged that was not an option for us.â€