By Ann Meyer
The town of Rockton, Ill., expects to see a ripple effect beyond job loss if Internet affiliate marketer FatWallet leaves the state this summer as expected due to the state’s new Internet tax law, officials said.
If the company vacates its 30,000-square-foot building in Rockton and moves its 54 workers out of state, Village Manager Dale Adams said it will be a noticeable loss for the community of 6,000, where the unemployment rate still hovers around 13 percent. “To lose 60 employees in a small town like ours is huge,” Adams said. “We’ve been fighting and scratching to bring jobs to our community.”
While FatWallet has enjoyed a strong presence in Rockton, it stands to lose 30 percent to 40 percent percent of its more than $13 million in annual revenue due to the Main Street Fairness Act, which Gov. Pat Quinn signed into law last Thursday, company spokesman Brent Shelton said. “In order to save the revenue, we’ve got to pack up and leave in a few months,” Shelton said.
According to the law, out-of-state online merchants must collect and remit an Illinois sales tax of 6.25 percent if they do business with affiliate marketers, such as FatWallet. Amazon and Overstock have said they will sever ties with Illinois affiliates rather than collect the tax, and other out-of-state online merchants are expected to follow suit.
While the company has not decided where it will relocate, Shelton said Wisconsin is a possibility because it is just a few miles away. “Strategically, moving across the border would be less stressful to employees,” he said.
But the company will look into whether Wisconsin is considering enacting similar legislation before it makes a decision, Shelton said.
The company has been a model of the type of business the area is trying to attract, said Einar Forsman, president and chief executive at the Rockford Chamber of Commerce. “We’re looking for tech jobs and good talent to build wealth,” he said.
Forsman said he was not surprised to learn Amazon and Overstock planned to abandon Illinois affiliates due to the Main Street Fairness Act because they have done so in similar states. “We’ve been very concerned that the governor was going to sign that” legislation, he said. “It’s our belief that it’s not going to yield any significant revenue at all” for the state.
Besides the loss of local jobs created by the company’s growth, the company’s move also would be a loss to the community, officials said. The company has donated funds to a variety of causes, including parks, sports programs, education and charities. It contributed most of the funding for a new $50,000 ice skating rink and also donated about $10,000 to a food pantry in December, Shelton said.
What’s more, FatWallet chief executive Tim Storm has brought attention to the area, Forsman said. The company, which has been recognized by the Great Place to Work Institute, provides lunch for its workers everyday, which is generally catered from local restaurants.
“We hate to see them leave,” said Al Intravaia, manager at Bravo’s pizza in South Beloit. He said the company orders from his restaurant once or twice a week. “The best customers are the every-week customers. Those are the ones that keep you on your feet,” Intravaia said.