Seattle’s city council has voted unanimously to pass a new tax on major businesses in the city. The new tax will apply to all major companies in Seattle grossing more than $20 million, affecting about 3 percent of the city’s business community.
The tax will charge each business $275 per full-time employee each year, collecting about $48 million a year. The tax would start January 1, 2019 and expire five years later. Renewal would require a council vote in 2023.
The vote came after weeks of negotiation between Seattle’s city council and Mayor Jenny Durkan. The initially-proposed tax would have cost companies $500 per employee and could have gathered about $75 million per year. That proposal was vehemently opposed by the Seattle Metropolitan Chamber of Commerce. Mayor Durkan had originally proposed a goal of collecting $40 million annually.
The new tax is meant to pay for homeless aid programs. About two-thirds of the money collected will be spent on new affordable housing units housing. The rest of the money will be spent on rental subsidies, shelter beds, garbage services, and other immediate needs.
Homeless advocates say the tax is needed to alleviate the living conditions of Seattle’s poorest residents. The city declared a homelessness state of emergency in late 2015. Seattle’s King County homeless population is the third largest in the United States. A count last year tallied more than 11,600 homeless people in King County. One in 16 Seattle Public Schools students is homeless.
The vote appeared to infuriate the city’s big business community. Seattle staples Amazon and Starbucks will both be subject to the tax. Other companies set to be taxed include The Seattle Times and family-owned supermarket Uwajimaya.
Amazon will be taking the biggest hit as the city’s largest employer. With more than 45,000 employees in the city, Amazon could pay more than $10 million per year. Earlier this month Amazon put two large construction projects in the city on hold until the tax decision had been made. Amazon now will move ahead with it, a spokesman said after the vote.