Seattle repeals tax on companies like Amazon

  • Seattle repeals tax on companies like Amazon

Seattle repeals tax on companies like Amazon

The Seattle region has one of the highest homelessness numbers in the U.S.

As she seemingly goaded on her supporters in the council chambers, Sawant paused and let the chants swell before finally casting her vote against the repeal. People shouted, "Stop the repeal", as others unfurled a large red banner that read, "Tax Amazon". No Tax on Jobs needed to collect 18,000 signatures before Thursday to get the referendum on the ballot.

Amazon balked, and Seattle is backing down.

Businesses and residents demanded more accountability in how Seattle funds homelessness and housing and said it should take a regional approach to the problem. The head tax would target big businesses such as Amazon, imposing a tax of $275 per employee, per year.

The online retailer even temporarily halted construction planning on a new high-rise building near its Seattle headquarters in protest.

In a statement, Amazon Vice President Drew Herdener said the vote was "the right decision for the region's economic prosperity".

Though Mosqueda and Herbold's offices carried the legislation forward and Sawant championed the cause as a sequel to her successful drive for a $15 per hour minimum wage in the city, the driver for creating the new tax grew out of recommendations from a Progressive Revenue Task Force convened to help Seattle find new sources of revenue and better combat its ongoing homelessness and affordability crisis.

The liberal city spent $68 million on homelessness in 2017 and plans to spend $78 million this year.

The new tax would have raised $48 million annually to combat Seattle's homelessness and affordable housing crises.

"We're turning away people at the shelter daily", said Julie Nordgren who works for Downtown Emergency Service Center, one of the region's top providers of supportive housing for the homeless.

"From Day 1, the No Tax on Jobs campaign has been a grassroots movement - and we want to thank our 2000 tireless volunteers and the more than forty-five thousand Seattle residents that signed the jobs tax repeal petition", No Tax on Jobs campaign spokesman John Murray said in a statement. The message gained traction with some homeowners, frustrated by the city's response to homelessness, in particular tents and RVs moving into residential neighborhoods. She lashed out at business interests for blaming the problems on government inefficiencies.

Stephanie Formas, a spokesperson for Durkan, said the mayor will explain future funding when she releases her full 2019 budget proposal this fall.

"I was thinking there's a decent likelihood we spend millions of dollars beating each other up, and months from now have no new revenue and a homeless problem we haven't even begun to work on", O'Brien said in an interview Monday night.

Councilwoman Teresa Mosqueda voted against the repeal, saying the lack of a replacement strategy would mean more months of inaction. Now, as voters seem less amenable to more property taxes, the support could be more important than ever-and the head tax fight risked straining that relationship. She said it would hurt small businesses with thinner profit margins than Amazon.

The tax, which is now scheduled to take effect in January 2019, amounts to $275 a year per full-time employee of the highest grossing businesses in Seattle.

This reversal on the head tax is an unprecedented move in Seattle politics. The "Google tax" aims to alleviate transportation woes and high housing costs in the Silicon Valley city south of San Francisco. "It is also a kowtowing to corporate politicians like Jenny Durkan".

"We can not wait months or until next year for another proposal or process while people are sleeping in our parks and on our streets", she said in a statement.

Tax supporters faced the prospect of having to fight the campaign that easily raised more than $280,000 in cash contributions in just weeks.

The company recently said it would block Australians from purchases on its worldwide websites after the nation planned to impose a 10 percent consumption tax on online retailers for goods shipped to Australia.