September 17, 2013
In my day job I work with growing technology companies, and I’ve spent a good chunk of my career trying to help grow Illinois’ entrepreneurial community. Here’s an email forwarded to me by the CEO of a young Illinois company I work with that he received. It should make all of us who are interested in local job growth puke. I’ve redacted the names, but it came from a major West Coast technology company — one of the largest in the world. They provide technology and services that are key to this company’s growth and to many others here:
Understand what this is saying. The account rep along with his technical partner and an engineer or two can’t travel into Illinois — and no doubt cannot be placed here — because that would establish “nexus” for purposes of imposing Illinois sales tax, so they need to meet in Wisconsin, instead.
We take pride in Chicago as an international city with a fine startup community, but we have to go to Kenosha to meet one of the world’s leading companies? Sheeesh. The CEO of the Illinois company wrote this to me when he forwarded the email:
It is hard enough to build tech businesses in Illinois…. And whatever they think they are collecting in taxes in this policy, they are actually losing on the other side in the form of payroll tax…. I am not a political guy for the most part – but this one really gets me.
That CEO recently returned from California visiting investors, who may well encourage him to move there.
A thriving startup community that many in Chicago have worked for years to establish is now a splendid reality. A bad economy has actually helped that effort, as I’ve said before, but this kind of tax policy is horrible for everybody, including our insolvent government. I don’t claim to have all the answers for fixing the national mess that sales taxes have become, but something is obviously terribly wrong in Illinois in particular.