Seattle revisits large employer tax amidst pandemic business shutdown

In a new version of the employer “head tax” hastily revoked by the Seattle City Council in 2018, Councilmembers Kshama Sawant and Tammy Morales have reintroduced a payroll surcharge that would tax Amazon and approximately 800 other businesses.

The City Council heard initial testimony on the proposal on April 22. Newly elected Councilmember Alex Pedersen has co-authored an op-ed in the Seattle Times with Windermere Chief Economist Matthew Gardner opposing the tax.

Here are the key points of the tax proposal:

  • Imposes a 1.3% tax on business payrolls of $7 million or more annually.
  • Expected to generate $500 million annually.
  • Proceeds would support emergency cash assistance payments in 2020. In 2021 and thereafter proceeds would support affordable housing and housing-related Green New Deal expenditures.
  • Exempts federal and state government entities, nonprofit organizations, grocery stores, and businesses preempted from taxation by cities under federal or Washington State laws, and businesses with payrolls below the $7 million threshold.

The Seattle King County REALTORS® strongly opposes taxes on jobs. Now, more than ever, such proposals are counterproductive as we plan to help shuttered businesses recover from the coronavirus pandemic shutdown. Taxing jobs results in fewer jobs. Fewer jobs result in fewer homebuyers and a weakened real estate market. By protecting jobs, we will promote economic recovery.

“We oppose this new tax and any other obstacles to business recovery,” said Georgia Stevens, President of Seattle King County REALTORS®. “The timing and intent of this proposal couldn’t be more counterproductive.”

The REALTOR® organization is coordinating with the Seattle business community to stop the proposal and has signed a letter drafted by the Downtown Seattle Association opposing the new tax. Both Associations are encouraging real estate brokers to sign a petition to the City Council expressing opposition to new business taxes.

“Whether you are a small or large business, Seattle’s payroll tax will slow, not quicken, the restoration of the tens of thousands of jobs lost during the pandemic,” said Tyler McKenzie, owner of John L. Scott Real Estate-West Seattle. “Adding a new tax on jobs during a recession will hurt our economic recovery.”

Windermere Real Estate Economist Matthew Gardner and Seattle City Councilmember Alex Pedersen wrote an insightful op-ed piece in the Seattle Times earlier this week:

10 reasons to say ‘No’ to current payroll tax proposal

Op-Ed by Seattle Times Columnist Danny Westneat:

False advertising: They call it the ‘Amazon tax,’ but it’s so much more

Here are opportunities to join businesses and organizations expressing opposition to Councilmember Sawant’s proposal to tax jobs:

Sign the petition on change.org

Sign the business community letter