QUICK SUMMARY
Seattle's mayor and city council member propose a business tax overhaul to alleviate a $251 million budget deficit. The plan exempts businesses earning less than $2 million from the B&O tax while increasing rates for larger firms, potentially raising $90 million annually. Voters may decide on this initiative in November.
Seattle's mayor Bruce Harrell and council member Alexis Mercedes Rinck unveiled a business tax proposal designed to tackle a projected $251 million budget shortfall. The initiative would exempt small businesses earning less than $2 million annually from the city's B&O tax while raising rates for larger corporations. Harrell noted that the plan would reduce taxes for 90% of Seattle's businesses and generate approximately $90 million to safeguard city services against potential federal funding cuts. The Seattle City Council, known for its support of Harrell's administration, will review the proposal before it is presented to voters in November. The city anticipates 8% cuts to departments supported by its General Fund, with public safety departments also facing reductions. Rinck contextualized the tax changes within the "Seattle Shield Initiative," which aims to support local businesses and essential services amid federal funding threats. The new tax structure would lift the exemption threshold and adjust rates for larger companies, potentially exempting around 16,500 businesses. The proposal's implementation is planned for four years, from 2026 to 2029, with an option for renewal.