
Entrepreneurs who participate in online retail should pay close attention to the recent relocation of Shopobot from San Francisco, CA to Seattle, WA. Amid rising concerns about online taxation, this Internet-based shopping company has relocated to the more financially stable city of Seattle, WA. It doesn’t take an MBAdegree to know that the current economic crisis has affected companies’ sales, but now, online-based companies are unsure as to how online business will be taxed in the future. This has resulted in many companies relocating to different cities across the United States.
The economic crisis has left state governments short of funds, and they have begun to view the taxation of online sales as a source of potential revenue. This position is being encouraged by big-box stores such as Best Buy, Wal-Mart, and Target. These companies have long resented the perceived cost advantage that online retailers gain from not having to pay local taxes. In California, a law was passed in June that attempts to force large online retailers such as Amazon tocollectsalestaxonpurchasesfromCaliforniaresidents. In response to this new law, Amazon quickly exited the California market by dropping over 10,000 affiliated businesses from their roster.
Read More »