(Image: City of Seattle)
Seattle’s centrist mayor is teaming up with the city council’s most progressive member on a business tax proposal they say will boost the city’s small and medium businesses while helping overcome a projected $251 million budget shortfall. Voters could decide on the temporary, four-year change this fall.
Mayor Bruce Harrell and Councilmember Alexis Mercedes Rinck unveiled the proposal Wednesday that would make any business generating less than $2 million a year exempt from the city’s B&O tax while raising the tax rate on the city’s most prosperous companies.
“This plan would reduce taxes for 90% of Seattle businesses while raising a needed $90 million to protect city investments against Trump threats to federal funding and to our local economy,” Harrell said in the announcement.
The proposal is now in the hands of Rinck and a Seattle City Council which has so far been friendly to Harrell administration policy. Once approved, the proposal would go to Seattle voters in November.
CHS reported here on the belt tightening and cutbacks underway under the Harrell administration as Seattle faces a “pessimistic” revenue forecast. City Hall is preparing for planned 8% cuts to departments supported by the city’s General Fund and payroll tax on its largest employers. The Seattle Police Department and all “public safety related” departments are preparing for a 2% slash. The city’s spending on homelessness could also be similarly cut.
Rinck, meanwhile, has said she will be “working to review progressive revenue options as she leads the council’s Select Committee on Federal Administration and Policy Changes.
Both Rinck and Harrell are also engaged in campaigning as they face a 2025 battle to stay in office. CHS reported here on the latest endorsements from the 43rd District Democrats group which blessed Rinck with its support but is supporting Harrell’s progressive challenger Katie Wilson in the upcoming August primary.
In her comments on the new business tax proposal, Wilson blamed Harrell for dragging his feet on identifying new revenue opportunities but praised Rinck for “taking the lead on raising new progressive revenue at a moment when the city is facing a massive budget shortfall and the threat of federal cuts.”
Rinck is putting the new B&O tax proposal in context of the Trump administration’s erosion of federal support programs, calling it the “Seattle Shield Initiative.”
“Under Seattle Shield, voters would have a choice this November to give small-and-medium mom and pop shops the ability to stay open, while ensuring the largest corporations contribute more to safeguard our city and residents from the Trump Administration,” Rinck said in the announcement from the mayor’s office. “This fairer tax system would raise an estimated $90 million each year to fund the type of essential services that are under attack.”
Currently, businesses operating within Seattle that generate more than $100,000 a year in revenue are subject to Business & Occupation Tax Rates around 22 cents per $100 of taxable receipts.
The new proposal would lift the threshold to businesses making more than $2 million a year and bump the rate to 34 cents per $100 for retail, wholesale, and manufacturing companies and from 43 cents per $100 to 65 cents per $100 for service companies.
The city says the change would exempt approximately 16,500 small and medium-sized businesses — 76% of current taxpayers — from the B&O tax. The city would also create a new B&O deduction, allowing all businesses to only pay B&O taxes on gross receipts above $2 million.
The altered business tax platform would be in place for four year from 2026 to 2029 — when Donald Trump’s current term is scheduled to end. Though Rinck and Harrell are prepared for anything — The proposal could include an option for the city council to renew the plan for an additional four years.
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“The altered business tax platform would be in place for four year from 2026 to 2029 — when Donald Trump’s current term is scheduled to end.” Seems like a typo, CHS.
He’s merely clairvoyant.
👨🎤” I just find that this is not the socialism that we voted for.”
Me: what did you expect. Being liberal/socialist is expensive here in America, under any president!”
This is a comments section you don’t have to talk to yourself ya goof
This seems like such a good idea, I’m surprised the mayor is on board with it. Why does it need to have an election, though? Why can’t the Council simply pass it and the mayor sign it?
A pretty decent proposal… only affects the big chains.
I appreciate actually taking some action to protect Seattle from the chaos coming down from this Republican administration. I will be happily voting for AMR again in the fall.
From the ST article” Wilson backs the idea and calls it “smart” but casts it as opportunistic on Harrell’s part, instead crediting Mercedes Rinck with driving the effort.” I’m not really a Wilson backer, but I believe this to be true
A tax on land values that meant commercial properties paid a higher rate than homeowners — split rate, with a lower tax on improvements (to get land developed) — would help. You can’t move land like you can high-paying jobs or a storefront…the value of Seattle is its location (why else do people come here?) and the business community reaps that value but doesn’t pay anything like what it’s worth. Amazon could be anywhere — the geographic advantage is the workforce, some of whom were invested in by state taxpayers. Same with Meta, Google, Apple, et al who have opened offices here.
I see this proposal getting Seattle Processed to death.
Good idea….how about a state income tax next!?
Nawwww…Taxing the wealthiest persons on the planet is plenty. We need the poor to pay LESS not more.