Businesses ask Council to repeal payroll tax

Sep 1, 2020
Written by wpengine

A business coalition has asked the Seattle City Council to repeal a payroll tax it approved in July.

The request was in a letter signed by the Downtown Seattle Association, Seattle Metropolitan Chamber of Commerce, Associated General Contractors of Washington, the Building Owners and Managers Association of King County and the National Association for Industrial and Office Parks.

The business groups said it was reckless of the Council to approve a new tax in the midst of the Covid-19 pandemic, which has caused what the letter refers to as “the most severe economic crisis to hit Seattle in nearly 100 years.”

Council members have declined comment to the media about the request. The tax goes into effect on January 1, 2021. The payroll tax is targeted at businesses with payrolls of $7 million or more that have high-compensation employees ($150,000 or above). The tax rate on the employer rises based on total payroll and the level of employee compensation.

The letter estimates Seattle could lose $37 million in annual worker spending if just 10,000 jobs are moved outside the city.

The business community is concerned that the tax is poorly timed because the pandemic has forced the closure of scores of small downtown businesses. Company remote work policies have removed thousands of shoppers from downtown streets and Seattle-based Amazon has begun surveying employees about other cities in which they might prefer working.

Two years ago, an earlier Seattle City Council repealed an employee hour tax after it sparked strong public opposition, including a signature campaign to place a repeal initiative on the ballot.

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