Seattle passes a smaller version of the 'Amazon tax'

Posted May 16, 2018

The Seattle City Council has approved a tax on large businesses such as Amazon and Starbucks to fight homelessness.

Both businesses have come out strongly against the tax questioning the city's ability to use tax dollars efficiently and responsibly.

The council had originally considered an annual "head" tax of $500 per full-time employee for Amazon and other large employers, but the amended measure that passed reduced that figure to $275.

On Friday, city council members approved a proposal to charge the large employers in the city $500-per-employee.

When the city council was considering a head tax past year, councilmembers were unable to agree on an employee-hours tax of 6.4 cents per employee per hour, which would have generated about $25 million annually.

With more than 45,000 employees in the city, Amazon could pay more than $10 million alone.

Much of the revenue generated from the tax will be used to build new low-income housing units, as Seattle is in the midst of a housing and homelessness crisis. The tax is expected to raise $47 million per year, monies earmarked for building affordable housing and funding emergency shelters.

"Big businesses like Amazon have many tactics to avoid paying their fair share of taxes, and it has required true dedication and sacrifice from hundreds of us to bring us to this point". Under the amended tax, Amazon will be on the hook for about $11 million annually, rather than the $20 million that the original proposal would have levied.

"I am quite confident that as we move forward, we can continue to have the best city anywhere for people to do business ... this is the city where their workers are going to want to be and that's why they're going to want to be here", she said.

Council President Bruce Harrell said in a statement that he stands by the decision the city has made.

That's down from the $75 million a year the original proposal would have generated by imposing a $540 head tax per employee for the next few years, after which it would be converted to a 0.7% payroll tax. Other companies set to be taxed include Starbucks and longtime, family-owned supermarket Uwajimaya.

CEO Marilyn Strickland from Seattle's Chamber of Commerce contended that "taxing jobs will not fix our region's housing and homelessness problems".

"We appreciate the leadership Mayor Durkan showed in a challenging, politicized environment". The report states it would take "between $360 million and $410 million a year to tackle current levels of homelessness-that's twice today's spending". The mayor instead proposed a tax of $250 per employee.

"When you work minimum wage at $15 an hour, you end up spending 90 percent or more of it on rent and the rest of it in bills", said Alexander Finch, 27, who identified himself as homeless and living in one of the city's tent communities. "Because this ordinance represents a true shared solution, and because it lifts up those who have been left behind while also ensuring accountability and transparency, I plan to sign this legislation into law".

Schoesler says he's already heard from, and had discussions with, Seattle business leaders about the issue. "It will be revoked by the Legislature - if a court doesn't do it first".