Seattle City Council scales back tax to aid homeless amid Amazon opposition

The city council passed a version of the tax Monday that was slashed nearly in half. founder and CEO Jeff Bezos presents the company's first smartphone, the Fire Phone, in this June 18, 2014 file photo. CREDIT: David Ryder/Getty Images founder and CEO Jeff Bezos presents the company's first smartphone, the Fire Phone, in this June 18, 2014 file photo. CREDIT: David Ryder/Getty Images

The Seattle City Council unanimously passed a tax on large employers Monday that will aid the city’s homeless residents — but not before slashing the proposal nearly in half over opposition from Amazon, which is headquartered in Seattle, and a veto threat from Mayor Jenny Durkan.

Companies that gross $20 million or more a year will now face an annual tax of $275 per employee. That’s down from the original $500 per employee proposed by Councilors Lorena Gonzalez, Lisa Herbold, Teresa Mosqueda, and Mike O’Brien, which drew Amazon and Durkan’s ire.

Democratic socialist Councilor Kshama Sawant was the sole vote against the amendment to reduce the tax from $500 to $275 per employee.

“There is no way this tax will be a burden on big businesses in Seattle,” Sawant told The Seattle Times.

O’Brien, one of the original proposal’s sponsors, said slashing the tax was the only practical way to move the measure forward.

“We could not find the votes we needed,” he told The Seattle Times.

The more robust proposal drew opposition from city hall, several members of the council, and construction workers’ unions, according to The Times. But its most vocal critic may have been Amazon, which threatened to stop construction on new facilities in the city and put 7,000 jobs on hold over the tax proposal.


The $500 tax would have cost the company $20 million a year over the next two years, according to The Seattle Times. After that, it would have risen to an estimated $39 million a year.

“[P]ending the outcome of the head-tax vote by City Council, Amazon has paused all construction planning,” a company spokesperson told The Seattle Times earlier this month.

That’s despite Amazon founder and CEO Jeff Bezos’ claim last month that he has too much money to spend.

Seattle declared a civil state of emergency over homelessness in late 2015. King County, which includes Seattle, recorded a record 169 homeless deaths last year. There were 11,600 homeless people living in the county last year, according to The Seattle Times.

Meanwhile, median cost of a single-family house in Seattle rose 110 percent since Amazon opened its headquarters in 2010, according to The Seattle Times. There’s no income or capital gains tax in Washington state, and Amazon paid no federal taxes on its income for last year.

The city councilors who sponsored the new tax said it was time for the company to pay its fair share.

“While Amazon didn’t single-handedly cause this problem, they have contributed to the growing income inequality, displacement and housing affordability issues facing our city,” they said in a statement to The Seattle times earlier this month.