Seattle City Council Reverses Controversial ‘Head Tax,’ Saving Amazon Millions Of Dollars Annually

The ordinance would have raised roughly $50 million per year to fight the homeless problem in the city.

Seattle repeals head tax, saving Amazon millions.
emperorcosar / Shutterstock

The ordinance would have raised roughly $50 million per year to fight the homeless problem in the city.

Just weeks after the Seattle City Council voted to create a “head tax,” officials have reversed the measure. Corporate behemoths Amazon and Starbucks, both headquartered in the city, pressured the council to re-think their position.

The decision to rescind the tax was approved in a 7-2 vote during a Tuesday last-minute meeting called by Council President Bruce Harrell, reports Fox News. Also supporting the reversal decision was Mayor Jenny Durkan.

The “head tax” ordinance, which passed unanimously on May 14, obligated any company with revenues of $20 million or more, such as Starbucks and Amazon, to pay the city a substantial tax per employee amounting to millions of dollars every year. The money was to be earmarked for programs designed to fight homelessness in Seattle. Specifically, the council promised to fund various projects like homeless shelters, more affordable housing, and other outreach campaigns.

Local businesses, including Seattle’s largest employer, Amazon, fought the city, arguing they already pay a significant amount of taxes and this new one is an unnecessary and excessive burden. No Tax on Jobs, a business-funded campaign, also went up against city hall to reverse the measure.

Amazon vice president Drew Herdener made a statement regarding the repeal.

“Today’s vote by the Seattle City Council to repeal the tax on job creation is the right decision for the region’s economic prosperity. We are deeply committed to being part of the solution to end homelessness in Seattle and will continue to invest in local nonprofits like Mary’s Place and FareStart that are making a difference on this important issue.”

In various subtle statements, some councilors insinuated other forces might have been at work to undermine the “head tax” ordinance, reported Q13 Fox.

“I’m in a position where I will vote to repeal this,” said councilmember Mike O’Brien. “But I don’t have a replacement for you… what this has proven is various components of our community have the power to stop things.”

“Money has funded this campaign to put us in a position where we have to repeal this law,” said councilmember Lorena Gonzalez. “It gives me no pleasure to have to repeal this law because I think this law was well done.”

Seattle’s “head tax” was set to go in effect in January 2019, with an expiration date for 2024. The city would have generated an estimated $50 million annually in additional funding.

Amazon would have paid an estimated $12 million per year if the measure had stayed on the books. Other large city employers including Nordstrom, Boeing, and Microsoft did not comment on the measure or their potential payment obligations.