Amazon and Microsoft back proposed business tax in breakthrough for fight against homelessness

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“Tax Amazon” signs adorn a 2018 event hosted by Seattle City Council member Kshama Sawant. (GeekWire Photo)

The Seattle-area business community is throwing its weight behind a proposal to tax high-paying companies in the region to fund housing and services for the homeless.

Amazon, Alaska Airlines, Expedia, Microsoft, Zillow, and others sent a joint statement to lawmakers in Washington state in support of legislation that would allow King County to tax the payroll of businesses that meet certain thresholds.

Support from the tech industry gives the bill a big boost and suggests that the fate of the legislation will not be the same as the fraught “head tax” debate that consumed Seattle politics in 2018. However, the issue of whether Seattle will be able to enact additional business taxes under the proposal is still being hammered out.

The joint statement stresses the need for solutions to the homelessness crisis that has gripped the Seattle region for years. It also doubles down on the business community’s desire for a regional approach to the issue, rather than cities within King County passing their own taxes and measures:

The homelessness crisis, including thousands of unsheltered individuals and families sleeping outside, increased demand for affordable housing, concerns regarding public safety and the need for more behavioral and mental health resources directly impact individuals and families who live and work in communities across our region. That’s why we’re joining together to urge a coordinated, regional approach rather than a piecemeal solution. We think the most high impact way to contribute to meet those needs is in the form of a new business tax imposed at a reasonable level with accountability for results in homelessness and affordable housing. We are encouraged by the effort in Olympia that would provide additional affordable housing and services to address the homelessness and public safety crisis but we believe it is critical that this legislation include a regional approach to address a regional issue. We recognize that this conversation is just beginning, and we look forward to working together with Legislators, the Governor as well as local elected officials throughout King County, labor and other advocates in a truly collaborative effort to finally make progress on this issue and at the same time continue to encourage the creation of jobs and investment in the region.

Update: Redfin CEO Glenn Kelman added his company’s support to the legislation in a blog post Tuesday.

“This bill permits a tax of .1 to .2 percent on the total payroll of employees who earn more than $150,000 per year,” he wrote. “It spares low-margin grocery stores and gas stations. It’s county-wide so businesses can’t easily relocate from Seattle to Bellevue in order to avoid the tax. It seems designed to address the concerns raised by Redfin and other businesses about the head tax.”

The bill authorizes the regional homeless authority in King County to tax the salaries companies pay to employees making more than $150,000 annually. It does not apply to businesses with fewer than 50 employees, unless more than 50 percent of the employees at those smaller companies make above $150,000 a year. Seattle Mayor Jenny Durkan, the champion of the legislation, estimates the payroll tax would raise $121 million each year it is in effect.

In its original draft, the bill does not preempt cities in King County from passing their own business taxes to fund housing and homeless services. That could become a key sticking point as the legislation is debated. If preemption is added to the bill, it would prevent Seattle from passing another ordinance like the head tax.

The Seattle City Council passed the ordinance two years ago only to repeal it a few weeks later amid opposition from the business community. It would have raised money for affordable housing and homeless services by taxing the top-grossing businesses in the city on a per-employee basis. Seattle City Council member Kshama Sawant dubbed the legislation the “Amazon Tax” and has vowed to pass new legislation this year targeting the tech giant.

“We welcome the announcement that King County may gain the ability to tax big business, but our movement has learned the lesson from the repeal of the 2018 Amazon Tax,” Sawant said in a Facebook post. “We will not put our faith in corporate politicians to stand up to bullying from Bezos and his billionaire friends. We will keep organizing and we will win the biggest possible Amazon Tax based on the strength of our movement.”

Washington state’s House finance committee held a hearing on the payroll tax bill Tuesday morning. Several tech executives testified their support of the bill, including Expedia Government affairs lead Richard de Sam Lazaro and Gravity Payments CEO Dan Price.

“We can’t solve these systemic issues through private solutions,” Price told the committee. “It can’t be done. We’ve tried over and over again. We need all of you to step up and have the democratic, systemic solutions that will create integrity in the system that all of us are a part of. Please do that by supporting this bill.”

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