Legislature to consider allowing King County to tax some large businesses to fund social services, housing, public safety programs.

Legislation has been introduced to allow Seattle to impose a tax on large employers with workers earning more than $150,000 annually. The Seattle Times reports,

Washington lawmakers unveiled a bill Wednesday that would allow King County to impose a tax on big businesses with employees who earn at least $150,000 a year.

The money raised would have to be spent on affordable housing, public-safety needs, homeless services and behavioral-health services.

HB 2907 is

AN ACT Relating to providing progressive tax reform by authorizing counties with populations exceeding two million to impose an excise tax on businesses in order to reduce homelessness, save lives, and improve public safety

Rep. Nicole Macri, D-Seattle, told the Times she was asked to introduce the bill by Seattle Mayor Jenny Durkan and King County Executive Dow Constantine.

Durkan and Constantine issued a written statement Wednesday, saying the tax could raise as much as $121 million per year.

Some businesses, she said, are also supportive. Expedia reportedly is backing the legislation. ST reporter Daniel Beekman writes,

Amazon declined to comment. The Labor Council, Microsoft, T-Mobile, Zillow, Alaska Airlines, Boeing, Starbucks and Puget Sound Energy were contacted and didn’t immediately comment…

Politicians, activists and corporate leaders have in recent months been scrambling to stake out positions on taxing big businesses. Seattle passed a per-employee tax on high-grossing companies in 2018 that would have raised an estimated $47 million per year. But the city almost immediately repealed the measure under pressure from a potential referendum and critics that included Amazon.

For some Seattle council members, it’s not enough.

The tax described in Macri’s bill may not be enough, City Councilmember Tammy Morales said. Morales said she has heard that $40 million of the $121 million raised would be allocated to Seattle each year.

“It seems like a chamber-driven effort to circumvent Seattle discussions,” Morales said, referring to the Seattle Metropolitan Chamber of Commerce, which opposed the 2018 head tax. “We won’t be distracted by this bill. We will move forward with plans to assess another mechanism to meet our housing and Green New Deal priorities.”

Beekman writes,

The chamber is still evaluating Macri’s bill, chamber President Marilyn Strickland said in a statement. So is the Greater Seattle Business Association, which represents LGBTQ and allied business owners, President Louise Chernin said, describing the concept as promising.

GeekWire reports,

The tax would apply to payroll expenses at large companies for employees earning above the $150,000 annual threshold. Salaries below that cap can be deducted from employers’ taxable payroll expenses. The legislation makes an exception for “small businesses” with 50 employees or fewer, where the majority of workers earn less than $150,000 per year.

The tax would not apply to “a comprehensive cancer center,” according to the current draft of the bill. Seattle is home to the Fred Hutchinson Cancer Research Center, a leading institution in the field. Employers facing “extreme financial hardship” can ask the county for a one-year exemption from the tax.

In Crosscut, Melissa Santos reports,

At this point, no Republicans in Olympia have signed on to Macri’s bill as co-sponsors. House Minority Leader J.T. Wilcox, R-Yelm, said Democrats are always proposing to tax businesses as opposed to coming up with other ideas. “Because it is the answer to everything, it’s almost a sign of unserious intent,” Wilcox wrote in a text message. 

“Taxapalooza reigns,” added Senate Minority Leader Mark Schoesler, R-Ritzville, in another text message.

 KUOW reports at least one local officials is opposed.

King County Council vice chair Reagan Dunn was swift to criticize the move.

“This renewed effort to tax jobs is a political zombie stumbling back from the graveyard of bad ideas,” Dunn said in a statement.

“This proposal is just Seattle’s failed head tax with a new coat of paint, the only difference is the original disincentivized job creation in Seattle and this version disincentivizes higher wages for the entire county.”

A hearing is anticipated next week. One to watch.