MYNORTHWEST NEWS

Why state senator believes Seattle’s head tax ‘will be revoked’

May 15, 2018, 10:25 AM | Updated: 10:37 am

head tax, Seattle head tax...

People fill a hallway before the Seattle City Council approved a head tax on May 14. (AP Photo/Elaine Thompson)

(AP Photo/Elaine Thompson)

The state Legislature may have to deal with Seattle’s new head tax on businesses next session, according to Senator Mark Schoesler.

RELATED: Head tax 101

Schoesler (R-Ritzville) drafted a bill that says cities do not have the “constitutional authority” to levy such a tax.

“New taxes not authorized in statute are not legal,” he told KIRO Radio’s Hanna Scott. “There is a legal problem with this as well as an economic problem.”

The Seattle City Council approved a modified version of the head tax that created a rift between city government and the business community. Under it, businesses grossing $20 million a year will pay the city $275 a year, per employee until 2023. The money will be used for low-income housing, homeless services, and emergency services.

Businesses, including Amazon and Starbucks, criticized the vote. Amazon Vice President Drew Herdener said the company is “disappointed.”

An estimated 585 businesses will have to pay the tax, according to data from the city obtained by The Seattle Times. That number is based on revenue from 2016.

Schoesler says this is a similar situation to Seattle’s income tax. After pushing the income tax into law last year, a King County Superior Court judge ruled it was not authorized under state law. However, that played into the city’s plan to take the issue to the state Supreme Court.

Schoesler says that despite proponents calling the head tax “progressive,” it’s actually regressive for the city’s job creators.

The senator believes he can prove the head tax is illegal.

“Research by our attorneys clearly shows it’s not in statute.”

Meanwhile, Schoesler says state Attorney General Bob Ferguson has been “strangely silent” on the topic.

Schoesler’s bill would reaffirm that no municipality in Washington state can enact a head tax — or as he calls it, a jobs tax — without direct authorization from the Legislature. It would put an end to the “horrible message” sent by Seattle.

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