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Seattle Repeals Newly Passed Large-Employer Tax

Less than a month after a tax on large employers passed the Seattle City Council unanimously, the council repealed it by a 7-2 vote on Tuesday. The purpose of the tax would have been to raise almost $50M a year for homeless services and affordable housing in the city.

Amazon's Seattle campus

The tax levied $275/employee for companies located in Seattle that gross more than $20M a year. 

Even before it passed in mid-May, the tax was a lightning rod. Soon after the council passed it, businesses and other organizations began collecting signatures to put the tax to a vote on the November ballot. By early this month, it appeared that there would be enough signatures for a vote. 

On Monday, Seattle Mayor Jenny Durkan and other members of the council issued a statement that said the tax would "lead to a prolonged, expensive political fight over the next five months," that it would do nothing to alleviate the city's homelessness crisis and that the tax was going to be repealed.

Though not specifically aimed at Amazon — about 585 local companies would have been subject to it — the tax was widely seen as a rare example of the retailer's hometown demanding a portion of the retailer's vast wealth, Bloomberg reported.

Amazon apparently took umbrage at the demand. While the council considered the tax, Amazon paused development of a new high-rise in Downtown Seattle near its HQ (though it resumed construction after the tax passed), and the retail giant also donated money to the campaign to repeal the law.

Daniels Real Estate President Kevin Daniels, an active developer in greater Seattle, told Bisnow recently that the tax gives the world the impression that Seattle is not business-friendly, though he didn't believe that was the council’s intention.

The problem of homelessness in Seattle was further quantified recently when King County reported that there has been a 4% increase in the number of homeless in the county since it counted a year ago, to 12,112, with more of them living in tent camps, cars, RVs and street than in shelters.

During the recent primary election, San Francisco voters approved a measure to tax commercial property owners to raise funds for education, but defeated a measure that would have levied a similar tax to fight homelessness.