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Startup Flees To Seattle Amid Amazon's Tax Fight
An anonymous reader writes "SF-based comparison shopping startup Shopobot was caught in the fight between Amazon, big-box retailers, and politicians over collecting of sales tax for online purchases. So what did the entreprenurs do? Flee to Seattle, right next to Amazon HQ, where marketing affiliates have a chance — because Amazon already collects sales tax in WA." And if you must flee, Seattle's a nice destination.
And in the event of civil uprising in the states, Canada is only 2 hours away.
vos nescitis quicquam, nec cogitatis quia expedit nobis ut unus moriatur homo pro populo et non tota gens pereat.
They don't have a sales tax there, won't ever have to deal with it there.
As a rock-in-roll Physicist once said, No matter where you go, there you are.
Oh yeah, today's Stay Away from Seattle Day. I think /. is trying to subvert this most wondrous of holidays!
I've been to Seattle.
The sun hasn't.
I wouldn't flee there except that I then proceed to another destination.
No no no... stay away from Seattle. nothing to see here. it rains all the time!. this is not the city you seek. you want...Portland, yeah! Portland is much more friendly and bike-centric and mellow. Seattlites are all hyper-liberal coffee-drinking zombies... save yourself! stay away! ....aaaaieeeee..... [end of transmission]
over taxes and regulation. According to this blog (LOL, only "business relocation coaches" have secure employment in CA) companies leaving CA has increased 5-fold since 2009, an average of 5.4 per week! And Chief Executive magazine has again ranked California last of 50 states to have a business. 14 states have tasked their economic development agencies with luring away California companies tired of high taxes, profuse regulations, and an extortionate legal system. So let's not just make this about Amazon. Everyone is fleeing CA. In fact, WA is not even safe. With the NLRB's overreaching against Boeing, their next move might be to China.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
Many new .COMs on a shoe string budget are opening there because of no sales taxes and other breaks. Texas is nice too, but the legislature keeps flirting with the idea of implementing an internet sales tax which scares many businesses. I strongly prefer to live in Texas vs Oklahoma, but any sales tax can quickly throw you out of business as it is an unfair disadvantage over someone else who can sell things cheaper.
California is a bad place for a startup due to its unfriendly business atmosphere, which is why companies there are laying off so many workers. I am surprised how the .com revolution even got started there? Maybe those were the days before Wall Street and cost accountants cared about profitability and taxes?
http://saveie6.com/
You exaggerate, Sir. Seattle has a summer. This year it was last weekend.
I think we, in many ways, have a better environment for startups than the SF area. There's a lot of good talent up here.
And it's not rainy year round. The summers are gorgeous and sunny. The SF area is pretty rainy in the winter too.
Need a Python, C++, Unix, Linux develop
WHAT THE FUCK AM I READING?
IF you like good beer and coffee, then yeah, come to portland. We will treat you and your business well.
Seattle is where old douche bags go to die.
The Kruger Dunning explains most post on
A) People from Seattle move the CA and get funding for a CA organization B) Amazon throws a hissy fit over having to collect taxes.(something they do in other states already) C) Amazon just off thousand of people D) These guys flee the state that got them started, and move to Washington so the can cozy up to the people that cut them out.
and, of course,m /. will blame CA for this, not understand this is about collection, blame CA for driving off a 2 man company, and ignore the fact that cutting people off was a strategy calculation from Amazon to put pressure to go to a one tax for all states model that have spent millions lobbying for.
As for the people who started the company? they where just leeches to get CA money and leave, this just provided a convient PR move so they can kiss amazons ass.
Not all small business owners in CA want to leech and leave; it's just prohibitively expensive to run a low-revenue operation.
Businesses are fleeing California for a lot of reasons.
Those that remain may enjoy their fitted sheet mandate as enforced by their mattress police.
Oh, I don't know about that. I'm sure that a lot of Canadians would like to overthrow the US government...
HA! I just wasted some of your bandwidth with a frivolous sig!
You shouldn't come to Portland either. We also have tons of rain, and... there's nothing to do here... so stay down in Cali where you're safe from the harmful drops of water that mysteriously fall to earth.
FanFictionRecs.net
Just a business and occupation tax which varies by industry. In most cases it's about 1% of revenue, which is pretty business-friendly.
Oregon has a two-tiered corporate income tax, which tops out at 7.9% of profit over $250k. Web-based services usually have low expenses, so there's not much difference between revenue and profit, making Washington the clear winner.
I'm just a one man operation doing a browser with mobile app API for my own service (for extra money revenue -- not a true startup in the typical sense) that got shutdown mid-development by this fracas. However, I'm not ready to move to Seattle -- lived there for 15 years, and unless you are wealthy the place has fuck all going on. I'm not wealthy and my CPA advises me that simply filing incorporation in another state without significant infrastructure there will not pass the smell test.
However, I'm considering living in Cabo San Lucas for the next couple years on an FM3 and looking at ways to swing that little complexity. But personally, I'd rather set up shop in Reno or Vegas under Nevada Charter than Washington State, if anything because Nevada is very corporation friendly and in much closer proximity to CA than Seattle and the property values there are still very reasonable since they didn't have the quite housing bubble that Seattle and other major Metro areas did over the last 10 years.
Frankly, I'm ticked-off at Amazon since they seem to be willing to settle this matter with CA, but have pissed all over their affiliates and haven't even sent a damned email about this latest development and how it effects the possibility of reinstature. And that really speaks a lot to what trash and garbage they view their affiliates as. So I've moved on to other projects for now.
I've been there several times, and I think you may be exaggerating the length of the summer. Well, unless this was a particularly hot year. :)
Serious? Seriousness is well above my pay grade.
No, no!!! Not Portland! It's always rainy here and there are all of those smelly hippies and hipsters and... well, you saw Portlandia, didn't you? It's just like that. And there are cougars (the feline kind) roaming in the streets (no more cars to run them over now that we have so many bicycles) so you're not safe at all. Stay down there in beatuiful, sunny California. I'd be down there with you, instead of this hell hole, but we don't make enough money up here for us to move there.
That is all.
Look, California is one of the largest economies in the world for a reason. (Actually, a lot of reasons.)
If you don't want to give back to the state that you do business in, bye bye. You won't be missed. Have fun learning the hard way why nobody else is running a software company in South Carolina or whatever.
There's no -1 for "I don't get it."
Seattle's a nice destination until the volcano triggers the earthquake.
Or was it the other way around?
Look, it's really simple.
Taxing Amazon is unconstitutional on its face, and there is a supreme court decision which is on point that clarifies the issue.
Part of having integrity is supporting what's right even when it's not in your best interest. Yes, California is hurting, we get that. Yes, you need more money, we get that. No, it's not right, deal with it, and no, it's still not right even if you really, *really* need the money.
A better question is whether California really needs the money. Comparing CA with NH:
The CA budget is 9x the NH budget
CA has 28x the population to tax (income taxes)
CA residents have higher income on average than NH residents (income taxes)
CA has 17x the land area to tax (property taxes)
CA has much greater tourist draw than NH (meals and room taxes)
CA has a vast agricultural and industrial base (NAPA valley, Silicon valley) (business taxes)
CA has an enormous coastline which attracts international trade and recreation
NH has... hiking.
If you can't get 9x the revenue from 28x the population, you're doing it wrong.
Here's a thought: How about California just ditch all government infrastructure and duplicate the one in NH, expanded per capita. You would have no income tax, no sales tax, and an operating budget 3x higher.
Source:
http://slashdot.org/comments.pl?sid=2320930&cid=36754362
California
Population: 37M
Population Density: 234/sq mi
Area: 163,696 sq mi (770 miles from top to bottom)
2010-2011 Budget: 102 Billion
Budget per capita: $2756
NH
Population: 1.3M
Population Density: 146/sq mi
Area: 9,304 sq mi ( 190 miles from top to bottom)
2010-2011 Budget: $11.5 billion
Budget per capita: $8846
Cannot agree more. I'm a So-Cal guy and I love it here but I've been watching this state drive out business, particularly in tech, for the last 10 years. My hope is to stay and pay the insane state taxes, but if all the jobs leave (San Diego is still doing OK, largely thanks to Quallcom) I'm going to have to leave too. :(
Same story, different decade. Every year we hear about how horrible California is for businesses and how state X is being filled with ex-Californian's fleeing the high taxes. There are more people in California than the entire country of Canada. California is the eighth largest economy in the world. California has some of the finest educational facilities in the world. But none of that matters. Why? Because California has hot women. I don't want any stinky Seattle hippies, stoned Portland vegans, religious nutjob Texans, or angry bitch New Yorkers. I want hot, tanned, athletic beach body California women. And that is why there will always be people and businesses in California.
Watson hitting a seg fault?
"Never let your sense of morals prevent you from doing what is right" - Salvor Hardin
In California, we are happy when someone leaves. This has the effect of increasing the average IQ of both California and wherever they land. (Not to mention making more space for us.)
I don't read your sig. Why are you reading mine?
Ahh, a prime example of the warm and welcoming Portland attitude!
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Plus the sushi there is fantastic.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Look, California is one of the largest economies in the world for a reason.
Yes, the policies we had decades ago. Be careful, you are looking backwards, and the GP is looking forwards.
If you don't want to give back to the state that you do business in, bye bye. You won't be missed.
Yes, but up to a point. Both you and the GP may be a little overdramatic but the GP does have a point. For example how much of the economic success you refer to is from the aerospace industry? Bad news on that front:
http://washingtonexaminer.com/blogs/examiner-opinion-zone/aerospace-exodus-california
And what of the emerging private space industry that has its roots in Mohave? More bad new:
http://www.signonsandiego.com/news/2011/apr/14/competitors-are-wooing-california-space-industry/
On a personal note I know some guys who used to shape surf boards. Very small scale shop but respected by locals and profitable for years. They had to give it up due to ever increasing regulations.
Have fun learning the hard way why nobody else is running a software company in South Carolina or whatever.
I don't think US customers know or care where a software company is located, except possibly that it is a US operation. And with the increasing popularity of the digital supply chain -- developer to online store to consumer, no packaged goods or distributors -- this is becoming even more so.
You have to admit the California legislature is out of control and making California a less friendly place to do business than a few decades ago.
So y6ou're saying Katy Perry's onto something?
I listen to both RIAA and non-RIAA stuff if I like the music, tangential business/politics nonwithstanding.
Last year, summer was on a Tuesday wasn't it? At last it was up in Lotus Land...
...si hoc legere nimium eruditionis habes...
New Hampshire has one of the lowest overall tax burdens. Sometimes *the* lowest, depending on the year.
California has one of the highest overall tax burdens - 7th in the nation. (Varies, depending on the year and source)
We raise 3.2x as much money per person than California, while taxing each person much less.
Here's how we do it:
1) We have a hefty property tax. Unlike income and sales taxes, property tax is largely immune to economic swings. When the economy goes up, you pay X. When the economy goes down, you pay X. (Housing values are checked every 10 years or so.)
Basing your revenues on income, sales, and business taxes is a recipe for disaster. You'll always be in "feast or famine" mode, always be flush during the good years and in pain during the bad.
2) The property tax is simple: your house is worth this, you pay that. There is only one point of contention (the value of your house), so collection and enforcement is easy and straightforward. So is contesting the tax - there's only one point to argue: the value of the house.
Income, sales, and business taxes are complicated and require resources for collection and compliance. There are a ton of options, laws, and special rules that require coding, dissemination, interpretation, defense, and so on. All of this adds cost.
The added cost is mirrored in the public as well - the expenses you incur to force compliance are mirrored by similar expenses made by the public. If you audit someone because they took a bad deduction, they have to spend time, effort, and money defending themselves. That's time and money they don't spend productively - it drags down the economy.
The expense of collection and enforcement has a resonating effect as well. If the enforcement branch gets rid of a CPA paid $100,000, not only do they take an immediate $100,000 cost reduction, but the CPA will now pay taxes on wages earned in the private sector. Simple government gets you much more than the base cost comparison will show.
If you could simplify your taxes, the net gain to the state would be enormous.
3) We have one "per person" tax, you have three (income, sales, property).
Consider a tax which requires 40% of the income for collection and enforcement (ie - for every $100 taken in, $40 goes to the revenue department to pay for collection and enforcement). All else being equal, double the *number* of taxes and you double the income. Double the *rate* and you more than double the income.
In the previous example, if $40 is spent on collection you get $60 for revenue. If you double the taxes, you get $120 revenue. If you double the *rate*, you get $160 in revenue.
I could go on, but it's pretty simple from an economic point of view.
California revenue is a twisted tangle of expensive administrative policy which is inefficient and unproductive. They tax their citizens more, but get less revenue.
NH has a simpler system that is less burdensome, requires less government, and nets the state more income.
Some businesses and people may leave. It's their loss. There will always be businesses who will remain in California because a significant portion of the best talent available will not live anywhere else for a number of reasons.
Are you willing to run a business where you can't fire someone at-will? Most of those countries have stricter employee protection laws. In fact, only the US (49 of 50 states) has at-will employment. Also most of the countries you mention have single-payer health care and high taxes because of it.
If you are programming in Maple or Mathematica, then you are worth more than $80K/yr as you likely have a Masters or a Doctorate in Engineering or Applied Mathematics. These guys are a rare resource. As soon as something better comes along and/or the economy improves, you'll lose your talent if you aren't careful.
This is a reversal of a trend in the 1960's. It was so bad that there was a billboard that I remember there..
Will the last person leaving Seattle, turn out the lights?
Do a Google search for "Will the last person leaving" and you will find it in the top hits.
On April 16, 1971, real-estate agents Bob McDonald and Jim Youngren put the words, "Will the last person leaving SEATTLE -- Turn out the lights" on a billboard at S 167th Street and Pacific Highway S near Sea-Tac International Airport. The two realtors, who work for Henry Broderick, Inc., put up the billboard as a humorous response to pessimism generated by the national aerospace industry's nosedive, known locally as the Boeing Bust.
This page includes a photo of the billboard. Looks like California is the next to get the billboard.
http://www.historylink.org/index.cfm?DisplayPage=output.cfm&file_id=1287
Seattle has tried not to repeat losing major businesses leave.
The truth shall set you free!
If you had stayed in CA you would have had to learn how to drive.
Your safely back with all the other rolling hazards now.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
If you could travel would you be unemployed in Alaska when you could be in California? Also a seasonal tourist trade means that at different times of year you have a lot of people whose jobs have vanished for a few months. Also with the large number of illegal migrant workers in the USA and their employers hiding them under the radar the figures are unlikely to resemble anything reliable anyway.
Maybe they learned how to spell?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
If they were really serious they would have fled to Singapore http://en.wikipedia.org/wiki/Income_tax_in_Singapore 0%-max 20% GST 7% corp taxes almost non existent. I laugh when I see the online "raise US taxes" brigade. And a commited well educated workforce. Whats more Singapore is booming like most of East Asia so the real market is just next door. The only thing is they dont have an open immigration door policy like America so getting in the front door could be hard but life is good and if you are in there is zero chance you will become a victim of crime.
Seattle??? It's cold there, it rains, white bears are walking on the streets, grizzlies are seen from time to time too... I have even heard that if you want to eat fish you have to catch it first! Yourself!! Really! Thats some scary shit, I tell you. You catch a fish in Seattle and second later white bear is chasing you. And Walmartians are usually fully dressed (have you ever seen a picture of a Walmartian from Seattle? No!) - furs and stuff. I think the best place for business is Hawaii. Something is wrong, you throw papers into some volcano and blame local geological conditions for your documents loss. No documents no evidence :)
So, I guess, the moral is not to make your business dependent on a single company that is much larger than you? That's okay, I'd already learned that lesson - the last two startups I worked with that did that both went bust.
I am TheRaven on Soylent News
Video proof of the super high IQs: http://www.youtube.com/watch?v=F57P9C4SAW4 Duh!
No no no... stay away from Seattle. nothing to see here. it rains all the time!. this is not the city you seek. you want...Portland, yeah! Portland is much more friendly and bike-centric and mellow. Seattlites are all hyper-liberal coffee-drinking zombies... save yourself! stay away! ....aaaaieeeee..... [end of transmission]
Hmm, my seattle-living-friend's big complaint is that Seattlelites are wayyyy too mellow and laid back; it drives her crazy. She's moving to NYC, of course...
[I spent a large part of my youth in Seattle, so I'm not so bothered by it ... but I have utterly no desire to go back...]
We live, as we dream -- alone....
Stay the fuck out of seattle. Do NOT move here.
It rains all the time, homeless wander the street, the police beat up small children, gas is expensive, we have a big bed bug problem, there is no public schools for children.
Everything else that is bad, happens here in Seattle. We are overcrowded and have bumper to bumper traffic on our freeways.
Please stay away, we don't need anymore people here.
Be seeing you...
You just failed. The people considering Portland or Seattle can't afford to live in California. At least, not the parts nicer to live in than Portland or Seattle... which are numerous.
Washington Chill
Oregon Nazis
California Hippies
California Assholes
North to south progression, of course. There's something to hate everywhere.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
California has what it has because the wild people have always gone out west. There is still massive opportunity in California for those who seize opportunities. Those who sit on ass and wait for them to show up are having an ever-harder time. If a bunch of businesses go then a bunch of people will leave California and it will get cheaper, resulting in a fresh influx of interesting people with ideas. Some of them will start tech companies and they will find people to hire because other interesting people with ideas want to live in California, too. It's how we got the Silicon Valley in the first place.
With that said, global climate change could really nail California's coffin shut. Without the advantage of the nation's best weather, we become a much less desirable place to live.
It's the people (stupid?)
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
You can fire up Netflix right now and find 232389570 stand-up routines in which a black person talks about how they are proud to be a Nigga. The above question seems valid enough to me, even though we know the answer already.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
will not live anywhere else for a number of reasons.
One reason. They're faggots.
The queers are the best employees? That's a great reason to relocate to San Francisco. Actually, I worked at gay.com for a while, and it was actually an incredibly smoothly-working operation from what I could tell, though the powers at the top couldn't figure out how to monetize it sufficiently to persist, victims of their own success in the transition from ISP to web portal.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
What you say may be true. I work for a startup that started in Santa Clara CA. This is their world headquarters. They have many manufacturing plants world wide. The bean counters decide where it is good to build plants based on the people and the economy. If California were so great, you would expect plenty of new plants to take advantage of the opportunity and resources there.
In reality there are NO new plants in California and resulting jobs for California. This does not mean they are not expanding and building new plants. They have been having record quarters lately with quarters over 20 Billion in revenue.
So where are the manufacturing plants that are recently built or are being built?
http://www.theinquirer.net/inquirer/news/1011245/intel-fab-israel
http://www.oregonlive.com/business/index.ssf/2010/10/intels_new_hillsboro_factory_w.html
http://newsroom.intel.com/community/intel_newsroom/blog/2011/02/18/intel-to-invest-more-than-5-billion-to-build-new-factory-in-arizona
http://semimd.com/blog/2011/09/13/intel-mum-about-capex-ireland-fab-plans/
The headquarters is here.
2200 Mission College Blvd, Santa Clara, CA 95054-1549
What have they recently built in California?
http://www.intel.com/content/www/us/en/company-overview/intel-museum.html
California has published their rated for doing business in California. Businesses shop for places that are business friendly.
California may have great opportunities, but for many the pasture is greener elsewhere.
This is only one example. There are many more.
The truth shall set you free!
Interesting. The race to the bottom between countries, whereby they compete to slash taxes and regulations in order to attract businesses, everybody losing except the businesses, has been pretty ridiculous in itself, but America is the only country I've known to have a race to the bottom... with itself! Other countries degrade themselves to compete with foreign rivals, America eats itself from within!
In a nation of fifty states, there can only be one with the lowest taxes and loosest regulations, so this system can only benefit a few states at a time, to the detriment of the rest. The logical conclusion of this is that everyone has to keep slashing taxes and abandoning regulations until there's nothing left to cut.
The problem is, once every state has reduced taxes to zero, destroying essential public services and impoverishing hundreds of millions, and every state has abolished all regulations, letting corporations do what they want, to who they want, what happens next? Not only is there nowhere lower to go, but the resulting collapse of tax revenues means a collapse in government spending, meaning consumers have less money to spend, therefore economic decline, and all the businessmen rubbing their hands with glee at the thought of all the money they'll make in the new tax/regulation haven will suddenly realise that they don't have any customers.
Boeing moving to China? Considering how much money the US government spends on aerospace, and how much the aerospace industry is dependent on government spending, a government that cared about its people would never let that happen.
Anybody who thinks Portland is friendly clearly hasn't been to the midwest. Portland is a city on the brink, high unemployment, high food prices, high rents, high tuition, and people who are just plain high all the time have pushed Portland from the quirky, well-off city of the 90s to being hungry, homeless and angry. This city is a powderkeg, and it's only going to take a spark to make the Rodney King riots look like a day in Disneyland compared to how badly Portland's going to tear itself apart.
Furries make the internet go.
These guys aren't fleeing to Seattle because they fear the big-bad regulations of the People's Republic of California. They're fleeing out of fear of Amazon. Amazon's response to the sales tax proposal was to threaten to disown all of its affiliates in California, since the physical presence of affiliates was one of the justifications for asking them to collect sales tax. Amazon would rather stick a knife in the back of all of its partners, putting who knows how many people out of business, than collect a nickel of sales tax from its customers. They can't pull the same thing in Washington because it's hard to deny that giant former hospital on top of a hill with an Amazon logo already constitutes a physical presence.
They left San Francisco because the Bezos bear was gonna swat them out of spite, so they went to cuddle up next to it.
And this "startup" is two guys. Fine, maybe they'll make it big one day, sounds like they got plenty of capital. But it's still two guys. Why does the decision of a two-guy business rate a headline?
Not sure if you're seriously questioning that, or you thought he was making it up.
However, the unemployment rate nationally is ~9%. While 12% isn't 50% higher than 9%, 38% is much closer.
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dude, if I could mod this up, i so would.. lol
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