A controversial proposal to tax large companies in Seattle to alleviate the city's homelessness and affordable housing problems was approved on Monday.
The Seattle City Council passed it unanimously by 9-0.
However, the final package is almost half the size of the original proposal, which has never achieved a veto-safe majority in the Council. It was publicly opposed by Amazon, the city's largest private employer, and 1
The recently enacted ordinance, which will enter into force in January 2019, will levy a "poll tax" on the city's top-selling businesses. The tax is $ 275 a year for a full-time Seattle employee. It would cost an estimated $ 44.7 million a year and expire after five years, the council said.
This is less than the $ 75 million that the initial proposal would have generated by the introduction of a $ 540 per employee tax over the next few years. After that, it would be converted into a payroll tax of 0.7 percent.
Relative: For HQ2 hopefuls in the Amazon, Seattle serves as a warning.
The only companies affected by the new regulation are those who generate $ 20 million or more of annual revenue in the city. That's about 3% of companies in Seattle, or 585 employers, according to the Council's estimates.
About 60% of the revenue would be used to build affordable housing and 40% for homeless emergency services, Councilor Lorena González said Monday at the Council's public session.
Seattle Mayor Jenny Durkan, threatened with the job of costing the city with a veto on the original $ 540 tax, said on Monday night that she would sign the new compromise agreement.
"This legislation will help us tackle our homeless crisis without jeopardizing critical jobs," Durkan said in a statement.
It pledged "urgent action to get people off our roads and to safer places and eliminate garbage, needles and waste from our parks and communities" and "to create more accountability and transparency with taxpayers' money.
Seattle has no income tax because it is banned under the law of the State of Washington. Therefore, the city is limited in the way it can generate revenue and is currently based on sales and property taxes as well as business and rental taxes.
In recent years, the city has seen an economic boom, but also an acute, affordable housing and homelessness problem.
"People are dying at the gates of prosperity," Councilor Teresa Mosqueda said at the meeting.
Amazon is still not pleased
Due to the reduced tax burden, Amazon will lower its potential bill from an estimated $ 20 million a year to $ 12.4 million Given the fact that it employs about 45,000 people in the Seattle area. Nonetheless, the company is "disappointed with the City Council's decision to impose a tax on jobs," said Amazon Vice President Drew Herdener in a statement.
Heldener noted that the company, which has made a great deal of effort to alleviate the homeless problem, has resumed the construction of a new 17-story office tower that it had interrupted before the vote.
But, he added, "we remain very concerned about the future created by the Council's hostile approach and rhetoric towards larger companies, which forces us to question our growth here."
CNNMoney (New York) First published May 14, 2018: 5:18 pm ET