(The Center Square) – A study conducted by the Downtown Seattle Association and economic consultant ECONorthwest found that Seattle businesses pay an estimated two-thirds of city’s taxes.
The estimated share of taxes paid by businesses grew from 56% in 2013 to 64% in 2022, according to the study. That was estimated to come in at $1.1 billion this year. The biggest reason for the increase is the JumpStart payroll expense tax that was passed by the Seattle City Council in 2020.
The tax requires businesses with at least $7 million in annual payroll to pay between 0.7%-2.4% on salaries and wages of Seattle employees who make at least $150,000 per year. Companies such as Amazon, Meta and Google are subject to the tax.
“The overall incidence of City taxes did not change substantially until 2021 and 2022, with the implementation of the payroll expense tax, which has perhaps permanently shifted the balance between business and nonbusiness taxpayers,” the study explains.
The study also found Seattle’s taxes grew more than four times faster than the population and employment over the past decade. The city’s tax collection grew 94%, as employment grew by 19% and the city population grew by 22% since 2013, according to the data.
The Downtown Seattle Association points out that the city has grown increasingly reliant on new taxes to fuel new spending. Some of the new taxes stem from the Seattle City Council. These include the Sweetened Beverage Tax, the Short-Term Rental Tax and the JumpStart Payroll Expense Tax, all of which were established in the last five years.
The council-approved taxes totaled over $316 million in 2021 and nearly $310 million in 2022. Since 2018, the taxes brought in $700 million to the city, according to the study.
