A proposal to tax Seattle’s largest corporations — including Amazon, Expedia, and other tech companies — will be tabled while Washington state remains under its stay-home order.
The Seattle City Council has been remotely discussing the so-called “Amazon Tax” for the past few weeks, but Council President Lorena González put the kibosh on deliberations Thursday. González warned that the discussions are in violation of state rules that require the legislation to be discussed in public meetings at City Hall in a letter to the council obtained by The Seattle Times. Remote meetings are only permitted for routine business and responding to the COVID-19 public health emergency.
“I have become increasingly concerned that the substance of this proposal and the facts established in its legislative findings do not meet the high standard necessary to support a conclusion that the package as a whole is either routine and necessary or sufficiently related to COVID-19 and the current public health crisis,” González said in the letter.
To continue deliberations while the state’s stay-home order is in effect would put the council at “significant risk of litigation,” according to González.
The news is a relief to the business community, which has been sounding the alarm — via the Downtown Seattle Association, Seattle Metro Chamber of Commerce, and Washington Technology Industry Association — over the possibility of a new tax amid the current economic downturn.
“While it might be true that the city needs new revenues to cover the budget shortfall and additional costs from COVID-19, imposing a punitive tax on job creation will only ensure a slower recovery that further harms the very people you wish to help,” the WTIA said in a letter to the council last month.
The legislation would levy a 1.3% tax on the payrolls of Seattle companies whose annual payroll expenses exceed $7 million. Though payroll data is confidential, the City Council estimates 2% of Seattle businesses would be affected, amounting to about 800. The current proposal pledges to borrow $200 million from existing city funds to provide emergency cash assistance to 100,000 low-income families this year. The assistance would come in the form of four monthly payments of $500, equal to $2,000 per family. The $200 million would be paid back by revenue raised through the payroll tax. After the coronavirus crisis passes, the revenue generated by the tax would fund affordable public housing and Green New Deal initiatives.
Council members Kshama Sawant and Tammy Morales, the bill’s sponsors, could modify the legislation to more narrowly tailor it to the COVID-19 crisis. However, González is recommending further meetings on the legislation be postponed until public hearings can take place safely. That would require canceling meetings on the bill through at least the rest of May.
It would also render the proposed start date of the tax impossible. Under the current proposal, the tax would take effect June 1.
