Seattle may pull ‘head tax’ after Amazon, Starbucks cry foul

Seattle Mayor Jenny Durkan and city council members on Monday said they would consider legislation to repeal a “head tax” on the city’s large businesses, just weeks after the measure’s passage drew public criticism from Amazon, Starbucks and others.

Backed by Durkan and seven of the nine members of the Seattle City Council, the repeal effort is underway despite the tax’s unanimous passage on May 14. The approved version of Seattle’s “head tax” had called for large employers to contribute $275 per employee annually in an effort to raise roughly $50 million per year toward efforts to address Seattle’s growing homelessness crisis through affordable housing and outreach efforts.

“It is clear that the ordinance will lead to a prolonged, expensive political fight over the next five months that will do nothing to tackle our urgent housing and homelessness crisis,” Durkan and the council members said in a statement. “These challenges can only be addressed together as a city, and as importantly, as a state and a region.”

Seattle City Council President Bruce Harrell is set to sponsor the repeal legislation at a special meeting on Tuesday. The council’s members are also expected to hold a vote at the meeting.

Prior to the announcement, “head tax” opponents, including local business leaders, were scheduled to submit a petition calling for a referendum on the measure on Tuesday.

At least one member of the city council has vowed to oppose any effort to repeal the head tax without installing a replacement measure.

“While a vote may go forward to repeal the tax, our homelessness and housing affordability crisis gets worse,” Councilmember Teresa Mosqueda said in a statement. “We have people who are dying on the doorsteps of prosperity, and our neighbors and friends worry about being able to afford to live in the City while we have a booming economy.”

Several Seattle-based corporations, including Amazon, the city’s largest employer, publicly spoke out against the head tax in the hours after its passage. Local business advocates argued the tax would discourage investment in the city.

Amazon vice president and spokesman Drew Herdener said last month that the bill’s passage forced the company “to question our growth” in Seattle.

"The city does not have a revenue problem – it has a spending efficiency problem. We are highly uncertain whether the city council’s anti-business positions or its spending inefficiency will change for the better," Herdener said at the time.