With just shy of 71% of the vote, a measure to shift the city’s business and occupancy tax (“B&O tax”) was approved by Seattle voters. Proposition 2 will eliminate the B&O tax for about 75% of the city’s businesses and reduce the tax for another 15%. The remaining 10% of businesses – those with the greatest gross receipts – will see their B&O tax jump by about 60%. Proposition 2 is also expected to raise an additional $80 million in revenue for the city.
Proposition 2 was sponsored by Mayor Bruce Harrell and Councilmember Alexis Mercedes Rinck and backed by the United Food and Commercial Workers union. UFCW 3000 President Faye Guenther and a QFC store manager wrote an OpEd urging approval of the ballot measure. They argued that groceries generally have operate at a 2% profit margin on a very large volume of sales, generating large profits.
In an editorial urging voters to reject Proposition 2, The Seattle Times editorial board argued that the tax measure would raise taxes on a business community already dealing with $9.4 billion in new state taxes, mostly targeting businesses. The editorial board highlighted the 51% increase in the City’s operating fund over the past 7 years as the source of its budget problems.
The Downtown Seattle Association also raised alarms about Proposition 2, citing the fact that 20% of all downtown storefronts are now vacant. “Raising a B&O tax that is already the highest in the nation doesn’t solve the city’s self-inflicted spending problems,” declared the DSA in a statement.
