Seattle passes new tax on large companies despite Amazon’s howls of protest

Seattle passes new tax on large companies despite Amazon's howls of protestTech Crunch

Seattle’s city council voted unanimously to approve a new tax on the largest employers in the city, despite strong opposition by Amazon and other affected companies. The tax, on companies with more than $20 million in receipts, will amount to about $275 per employee and is intended for use in improving conditions for the city’s homeless.

The original proposal was nearly twice that, but was amended as a compromise measure after local businesses protested. Amazon was the most visible of them, making the dramatic public threat of suspending construction of one of its many skyscrapers in the city and repurposing another.

While the idea that a company would simply abandon a multi-million-dollar investment halfway isn’t really credible, changes to its scheduling, budget and usage plan would certainly affect local contractors — which is why many of the latter showed up to oppose the tax on Amazon’s behalf. A heated confrontation occurred between opponents and proponents gathered in front of Amazon’s Spheres earlier this month.

The idea of laborers lobbying in favor of Amazon, which is frequently decried as an extremely labor-unfriendly company, seems odd, but in this case at least the train of thought is clear. It should also be mentioned that Amazon has worked to ease the plight of Seattle homeless with a planned shelter at the base of one of its buildings and other contributions.

Zillow and Expedia also voiced concerns, alongside many other local businesses, in an open letter. “We oppose this approach, because of the message it sends to every business: if you are investing in growth, if you create too many jobs in Seattle, you will be punished,” the letter reads in part.

Although opposition seems to have succeeded in reducing the tax burden, it did little to convince the council that the tax itself was unsound, as today’s vote indicates.

“This progressive revenue stream balances the needs of our small business community, while ensuring we have the funding we need to provide critical housing and health services,” said Councilmember Teresa Mosqueda in a statement accompanying the vote. GeekWire was at the meeting and has some other interesting quotes from both sides.

The modified tax should generate some $50 million, much of which will be dedicated to “deeply affordable” housing in the city to be made available to people below the poverty line, with some going to emergency shelters and other social services. Around $11 million of that will come from Amazon. This would significantly increase (in fact, nearly double based on some estimates) existing spending along these lines.

The tax would last for five years, after which it would have to be reauthorized.

Amazon, for its part, seems to have abandoned its immediate threats for new, more vague ones. In a statement from VP Drew Herdener provided to TechCrunch, it said:

We are disappointed by today’s City Council decision to introduce a tax on jobs. While we have resumed construction planning for Block 18, we remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here.

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