Amid California sales tax kerfuffle, Shopobot relocates to Seattle

Dave Matthews

As a new Amazon affiliate, Shopobot co-founder Dave Matthews found himself in the middle of a big tax fight in California recently. It was a battle they couldn’t win. So, he and his co-founder, Julius Schorzman, packed their bags and moved to Seattle.

“It was these two giants fighting between the State of California trying to get sales tax, and Amazon not wanting to start collecting it. For us, being stuck in the middle, we got cut out of everything,” Matthews tells GeekWire. “Online retailers like Amazon decided they wouldn’t work with companies like us anymore.”

So, what did they do? They moved to the TechStars building in South Lake Union, which happens to be right across the street from Amazon’s shiny new headquarters. And — as it so happens — they hired an ex-Amazon employee as their first employee.

“We are actually growing now that we know where our home base is,” said Matthews.

Now, here’s the ironic thing. A week after they moved, Amazon and California lawmakers entered into a compromise that essentially delayed the sales tax collection issue to 2012.

Matthews laughed when asked about the irony of the situation. But the 33-year-old entrepreneur noted that the tax issue could creep back again in 2012, and because of that they don’t regret the move.

“At least all of that uncertainty is behind us now, which is good, but it is kind of ironic that when we …  finally got here that they decided it was not a good law,” said Matthews, who previously worked at Microsoft.

Shopobot is backed by Google Ventures, AOL Ventures and Silicon Valley angels. The nine-month-old company competes against Decide, the Seattle startup which instructs consumers on the best time to buy phones, TVs and laptop computers. Matthews was very much aware of Decide, and said now that Shopobot is in Seattle they are “looking to turn up the heat.”

Just like Decide, Shopobot offers price comparisons on electronics. But it is also eyeing video games, kitcheware, sporting goods and other categories. The service, which was started at the AngelPad incubator in the Bay Area, is currently in public beta.

Given all of the debate about Seattle’s tech ecosystem in recent weeks, Matthews said he was excited to get to know about the startup community a bit more.

“Now, we get a taste of both. We’ve tried the San Francisco tech hub, and it is very good,” he says. “So, we can’t wait to get to know this one a little bit.”

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