An Amazon Tax? Seattle Passes Payroll Tax Bill Aimed At E-Commerce Giant, City’s Other Top Businesses

The Seattle City Council late Monday passed a new payroll tax bill aimed at the city’s biggest companies, including Amazon. Known as “JumpStart Seattle,” the tax was passed in a 7-2 vote and will go into effect next year, pending the signature of Mayor Jenny Durkan.

The JumpStart bill will tax companies that make at least $7 million in annual payroll costs between 0.7% and 2.4% on the amount paid to employees based in Seattle. At the high end, for the likes of Amazon, whose payroll expenses top $1 billion every year, it will tax 2.4% for employees paid over $400,000 a year.

Proceeds from the tax will at first be put towards coronavirus relief efforts. Later on, they will be put towards addressing homelessness and housing problems.

When talks began in 2018, Amazon quashed the possibility of what it called a “head tax” via a referendum campaign. City council member Kshama Sawant recently began pushing to restart talks of a tax on big business, creating the “Tax Amazon” campaign to do so.

The council estimates that around 800 companies will eventually be subject to this new tax, which it says will generate $214 million a year for the city. Several types of businesses are exempt from the tax, including grocery and liquor stores, non-profit hospitals, motor fuel companies, and insurance providers.

While Amazon has long had a considerable presence in Seattle, in recent years it has begun spreading its business in the region outside of the west coast city, including spaces in Bellevue and Redmond.