iStores’ moment in the national spotlight

iStores’ president criticizes proposed state income tax on “60 Minutes.”

Internet Retailer


An article written by iStores Inc. president Adam Stites for a web site opposing a proposed state income tax for Washington State led to Stites’ appearance on CBS’ “60 Minutes” newsmagazine on Sunday.

Stites presented his arguments against the income tax in a segment that also featured President Ronald Reagan’s former budget director David Stockman and the father of Microsoft Corp. founder Bill Gates.

“I had written an article which was published on the Defeat 1098.com web site, which was the campaign against the initiative,” Stites says. “They saw the piece that I wrote and decided to contact us.”

In both the article and on “60 Minutes,” Stites said that if the proposed income tax—which appeared on the Nov. 2 ballot as I-1098—passed, he would have to pay $50,000 a year in state income taxes. Stites says he expects top-line revenue  of between $12 million and $14 million this year.

The measure was defeated by a vote of 940,970 against to 493,762 in favor, according to the Washington Secretary of State’s office.

“Like many businesses right now, getting lending from banks is difficult. We count on our retained earnings—the profits we made in current and prior years—to help fund our organic growth and growth through acquisition,” he says.   “To the extent government taxes that money out of the business, we’re unable to grow and preserve and add jobs at our company.” The tax would have applied both to Stites as an individual and his company because it is an S-Corporation, which is taxed like a partnership.

In his article on the Defeat 1098 web site, Stites said he relocated his business to Washington from Oregon in 2005 after the imposition of a county income tax surcharge. “Our type of business can be operated from almost anywhere,” he said. If 1098 had passed, Stites said he would have considered relocating company headquarters to a tax jurisdiction “that will allow us to invest our retained earnings for the future of our company and employees.”

IStores operates 12 niche e-commerce sites, including Xtremez.com, No. 490 in the Internet Retailer Top 500 Guide, an online paintball equipment retailer. Other iStore sites include PrankPlace.com, OurDesigns.com, Paintball-Online.com, and DrinkingStuff.com.

Response to the television appearance was positive, Stites says. “I received a lot of random ‘atta boy’ e-mails from people around the country, but nothing negative,” he says.


Adam Stites, iStores, tax battle, Taxation, Xtremez.com