Starbucks, Amazon tee off on Seattle's new head tax

Starbucks, Amazon tee off on Seattle's new head tax

The head-tax debate has been extremely divisive, with opposition questioning the need for more revenue for housing and homeless services, saying the city should do a better job of spending the funds it already has.

The tax, which has been unofficially nicknamed the "Amazon Tax", - named after the online retailer which is headquartered in Seattle - will affect businesses that generate annual revenue of $20 million or more, the Seattle Times reported.

The compromise approval - even without a ban on so-called "sweeps" and far from the originally proposed $500 per employee mark, let alone Sawant's bid for $1,000 - also yielded a major victory to the Socialist Alternative leader and activists calling for large companies to do more to address social issues in the cities in which they do business.

The Seattle City Council passed it unanimously in a 9-0 vote.

Republican State Senator Mark Schoesler says he will be taking action against the tax, introducing legislation that says it is an unauthorized tax unless approved by legislature, which "reinforces current law". But she said she was proud the plan for a new tax had "evolved more towards progressivity" and would do things like protect the city's small businesses.

Hederner, the Amazon vice president, said sharp increases in the city of Seattle's revenues have outpaced the population growth of the city during the same period.

Head taxes are extremely rare in the USA and the ones in place are a fraction of Seattle's proposal. Almost 600 employers - about 3 percent of all Seattle businesses - would pay the tax starting in 2019. The tax will be $275 per employee per year with a sunset clause of January 1, 2024.

Following the change, Amazon has said it will now continue construction on the new building but is still considering whether to lease space in a second tower. The Council estimates the tax will raise roughly $47 million a year on average.

The city's homeless population is growing, behind only NY and Los Angeles. At that time the city will evaluate whether or not to renew the tax.

The council voted 5-4 on Friday, May 11, to advance a $75 million head tax for consideration on May 14, but then Mayor Jenny Durkan made it clear she would veto such legislation. King County, which includes Seattle, recorded a record 169 homeless deaths previous year.

The Associated Press reports that the Seattle region had the third-highest number of homeless people in the US, despite the city spending $68 million on combating homelessness past year.

"By threatening Seattle over this tax, Amazon is sending a message to all of our cities: we play by our own rules", the letter said.

While Amazon has resumed construction planning on the downtown building, he said "we remain apprehensive about the future created by the council's hostile approach and rhetoric toward larger businesses, which forces us to question our growth here".

Supporters cite data showing Seattle's median home prices have soared to $820,000, and more than 41 percent of renters in the city ranked as "rent-burdened", meaning they pay at least 30 percent of their income on housing.

But the city says homelessness is a moving target.