While cities across the country line up to shower Amazon with billions of dollars in tax breaks and free office space, the Seattle City Council just hit the tech and retail giant — and the city’s biggest firm — with a new tax meant to fight homelessness and fund affordable housing.
At a packed and at times combative meeting on Monday, after multiple rounds of last-minute negotiations, the Council unanimously passed an amended version of the Employee Hours Tax (EHT), which will effectively serve as a payroll tax on Seattle’s megacorporations. The passage is a major victory for progressives in the city, including councilmember Kshama Sawant, who strongly backed the corporate tax.
The EHT, widely known as the “head tax,” is aimed at businesses with more than $20 million in yearly receipts — i.e., the richest three percent of corporations in Seattle, including Amazon. Those companies will now be taxed $275 per worker, annually, down from an originally proposed cap of $500 per worker. The tax is expected to raise about $48 million per year, funds to be spent on subsidies for affordable housing and resources for the city’s growing homeless population.
But Amazon is striking back. On May 2, the company announced that, until the vote was decided, it would call off all work on a 400,000-square-foot office block being built north of downtown Seattle — a threat the company dropped just after the new tax passed. Amazon still claims to be “evaluating options” to sublease another 700,000-plus square feet it has leased in a skyscraper currently …read more