Chamber of Commerce renews push to overturn Seattle big business tax

Jul 5, 2021, 8:41 AM | Updated: 9:32 am
Sawant, Amazon tax, coronavirus, Seattle, durkan...
(AP Photo/Elaine Thompson,File)
(AP Photo/Elaine Thompson,File)

In early June, a King County judge struck down a lawsuit filed by the Seattle Chamber of Commerce, which had sought to overturn the city’s big business “JumpStart” tax. Now, the Chamber is taking its lawsuit to the Washington State Court of Appeals.

State lawmakers bring Seattle head tax battle to Olympia

The measure was originally passed by city councilmembers in July of 2020, levying a tax on corporations with payrolls over $7 million. Under the measure, qualifying businesses are taxed 0.7% for every employee making over $150,000, and 1.4% for employees making over $500,000.

The Chamber of Commerce alleged in its lawsuit that the tax violated the Washington state Constitution, and that it conflicted with the right of state residents to earn a living wage.

“We filed this legal challenge because the payroll tax is illegal — it does not align with Washington State Supreme Court precedent,” Chamber President and CEO Rachel Smith said in a news release.

In her ruling striking down the lawsuit in King County court in June, Judge Mary Roberts took issue with that reasoning, given that the JumpStart tax is levied directly on qualifying businesses, and does not actually affect individual employee salaries. She also noted that city governments have broad authority to tax business entities.

The JumpStart levy has already figured heavily into Seattle’s spending plans for the future, with its estimated funds widely incorporated into the city’s 2021 budget for COVID-19 relief and homeless response efforts. A proposed charter amendment from a coalition known as Compassion Seattle — and incidentally, supported by the Chamber of Commerce — would also seek to redirect money from the tax to fund an expansion of homeless shelter spaces.

Taxing big businesses has also been a frequent source of conflict within City Hall. At the start of 2020, Councilmembers Kshama Sawant and Tammy Morales had initially proposed a more expansive 1.7% excise tax on just over 800 companies in Seattle, excluding nonprofits, small businesses, grocery stores, and government and educational employers.

Sawant: Amazon tax ‘only thing’ that can rescue Seattle economy

Months later, Seattle Councilmembers Lorena Gonzalez and Teresa Mosqueda blocked the measure, with Sawant stating that she was “completely stunned and scandalized” by the decision at the time. Mosqueda proposed her JumpStart business tax two months later, which the council would eventually pass with broad support (including from Sawant and Morales).

In mid-July of that same year, Mayor Jenny Durkan refused to sign the tax into law, claiming that it would “ultimately hurt Seattle’s ability to recover from the economic devastation caused by COVID-19.” With a veto-proof majority from city councilmembers, the bill went into effect after a designated waiting period despite the mayor’s objections.

The Chamber of Commerce eventually filed its lawsuit seeking to overturn the tax entirely in December of 2020. The litigation will now go before the state appeals court, which will review the King County Superior Court’s “application of the law.”

Local News

rapid covid test...
MyNorthwest Staff

UW doctor: When to use a PCR versus rapid antigen test for COVID-19

Dr. Geoff Baird with UW Medicine has a simple formula for weighing the two main COVID test types: PCR (polymerase chain reaction) and rapid antigen.
21 hours ago
USS John McCain...
KIRO Radio Newsdesk

Naval Station Everett welcomes USS John S. McCain

The USS John S. McCain is now docked at its new homeport, Naval Station Everett.
21 hours ago
vaccine booster, heart...
Stephanie Klein

What to know as Oct. 18 deadline for vaccine mandate approaches

The deadline for state workers, including educators, and healthcare workers to show their employers proof that they're vaccinated against COVID-19 is Monday, Oct. 18.
21 hours ago
KIRO 7 News Staff

Police: Two in custody after hit-and-run suspect rams patrol car; officer fires shots

Two people were taken into custody after a driver suspected of a hit-and-run rammed an officer’s patrol vehicle, resulting in the officer firing shots at the car Saturday night in Medina.
21 hours ago
Seattle library...
MyNorthwest Staff

Last of Seattle Public Library branch closures from pandemic comes to an end

Seattle has reopened its NewHolly library branch, meaning that for the first time since the start of the pandemic, all 27 of the city's branches are now up and running.
2 days ago
KIRO 7 News Staff

2 people shot in Seattle; suspect surrenders to police after SWAT negotiation

A suspect surrendered to police Saturday afternoon after two people were shot in Seattle’s Chinatown-International District, the Seattle Police Department said.
2 days ago

Sponsored Articles


How to Have a Stress-Free Real Estate Experience

The real estate industry has adapted and sellers are taking full advantage of new real estate models. One of which is Every Door Real Estate.
IQ Air

How Poor Air Quality Is Affecting Our Future Athletes

You cannot control your child’s breathing environment 100% of the time, but you can make a huge impact.
Swedish Health Services

Special Coverage: National Prostate Cancer Awareness Month

There are a wide variety of treatment options available for men with prostate cancer. The most technologically advanced treatment option in the Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform.
Marysville Police Department

Police Opportunities in a Growing, Supportive Washington Community

Marysville PD is looking for both lateral and entry level officers. Begin or continue your career in law enforcement for a growing, supportive community.

Small, Minority-Owned Businesses in King County and Pierce County Can Now Apply For $10,000 Relief Grants Through Comcast RISE

Businesses in King County and Pierce County can apply beginning on October 1, 2021, at www.ComcastRISE.com for a chance to receive a $10,000 relief grant.
Courtesy of JWatch Photography....
Experience Anacortes

Summer Fun Activities in Anacortes

With minimal travel time required and every activity under the sun, Anacortes is the perfect vacation spot for all ages.
Chamber of Commerce renews push to overturn Seattle big business tax