Seattle officially repeals tax on companies like Amazon, Starbucks

Opponents of the head tax at the City Council meeting Monday

Opponents of the head tax at the City Council meeting Monday

The city of Seattle is moving to strike its plan to tax large businesses and use the money to address the Emerald City's chronic homelessness problems.

The coalition is glad the "Seattle City Council has heard the voices of the people loud and clear and are now reconsidering this ill-conceived tax", said John Murray, a spokesman with the No Tax on Jobs campaign.

The campaign had already collected more than twice the number of signatures required to let voters decide on the November ballot whether to reject the tax, according to Tim Ceis, a general consultant to the campaign.

The $275-per-employee tax would have gone into effect in January for businesses grossing more than $20 million per year in revenue.

The repeal vote passed, negating the need for a referendum.

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The campaign has raised about $285,000 in cash contributions, with more employers, including Amazon and Starbucks, pledging almost $200,000 in additional support.

The quick surrender showed the power of Amazon to help rally opposition and aggressively push back on taxes at all levels of government, even in its affluent home city where the income gap is ever widening and lower-income workers are being priced out of housing.

"The announcement from Mayor Durkan and the City Council is the breath of fresh air Seattle needs", Marilyn Strickland, who heads the Seattle Metro Chamber of Commerce, said.

Seattle City Council is considering repealing the controversial per-employee business tax.

The council meeting before the repeal vote was raucous, with some public speakers decrying what they called a rushed capitulation without public hearings, and others in support of the repeal saying their uprising against the council was just beginning. The debate unleashed tense local divisions, exposing the anxieties of being the fastest-growing big city in the U.S. It also offered a warning to cities looking to court Amazon for its second headquarters about the political tensions such rapid growth can bring.

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It comes as a group formed by funding from numerous city's largest employers and business groups including the downtown chamber opposing the employee hour tax announced over the weekend it had collected more than the needed signatures required to put a repeal initiative on the ballot.

After six months of outreach and meetings, the task force published a report in March calling for a head tax - one of the only remaining solutions the city had to raise new revenue, they said - that would raise $75 million a year.

"We can not wait months or until next year for another proposal or process while people are sleeping in our parks and on our streets", she said in a statement.

"I'm in a position where I will vote to repeal this", said councilmember Mike O'Brien.

The first proposal would have taxed big businesses $500 per employee annually, and was attached to a spending plan that would have built 1,045 units of subsidized housing over the next five years.

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The Seattle region had the third-highest number of homeless people in the USA and saw 169 homeless deaths in 2017.

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