Lawsuit challenges Seattle’s head tax as unconstitutional

Dec 17, 2020
Written by wpengine

Five months after the City Council passed a tax on high wage earners, Seattle’s Metropolitan Chamber of Commerce has asked King County Superior Court to declare it illegal, invalid and unenforceable.

The Superior Court action asserts that the action is unconstitutional because it “taxes the right to earn a living.”

The tax is expected to generate more than $200 million in 2021 to help cover revenue lost due the coronavirus pandemic. It applies against larger companies including Amazon with at least $7 million in annual payroll and tacks a range of taxes from 0.7 to 2.4% on salaries and wages spent on Seattle employees who make at least $150,000 a year.

As companies struggle to survive the pandemic, a top priority of Washington Retail is to oppose any discussion of imposing a similar tax statewide. The chamber’s complaint says the Seattle ordinance lacks spending accountability and was hurriedly approved during one of Seattle biggest ever economic recessions that has claimed more than 200 stores and businesses and countless layoffs.