Internet company FatWallet.com signed a one-year lease to move its operations from Wagon Wheel Road in Rockton to the former Kerry Ingredients headquarters in downtown Beloit, Wis.
FatWallet owner Tim Storm said he had no choice but to move the company after Illinois Gov. Pat Quinn signed a law requiring all companies doing business in Illinois to collect and remit legally required sales taxes.
The lease needs to be approved by the Beloit City Council, which is holding a special meeting Friday night. FatWallet hopes to be in the new building by mid-April.
FatWallet officials estimated the new Illinois law would cost it about 30 percent of its business. The company had about $13 million in commission revenue by sending shoppers to the websites of retailers such as Amazon.com.
Illinois is the seventh state to pass the measure that is becoming known as the Amazon law, following Rhode Island, North Carolina, North Dakota, Kansas, Kentucky, Colorado and New York. Amazon has cut off relationships with companies in those states, other than New York, to avoid having to collect sales tax. Amazon is fighting the New York law in court.
Several other states are considering the Amazon law, but Wisconsin is not one of them.
FatWallet was started in 1999 and now employs 54 people. In 2007, the company moved into a $5 million, 30,000-square-foot building on land Storm bought. Storm, who lives in Rockton and is a 1986 Harlem High School graduate, said he has not made a decision what to do with the old headquarters. He said in an email that he is moving the company reluctantly.
“We have been a proud supporter of the Rockford community for years. We are disappointed the short-sighted political decision making in Springfield has brought that to a halt.”
FatWallet spokesman Brent Shelton said it may have been possible the company, which was voted as No. 20 on Entrepreneur Magazine’s list of Best Small & Medium Workplaces in 2010, could have moved part of its operations to Beloit and kept some workers in Rockton.
“We’ve developed a pretty unique culture and it just didn’t make sense to break that up,” Shelton said. “We thought it would be best to keep everyone together.”