Supporters and opponents of Seattle’s head tax pack City Council chambers for Monday’s vote. (GeekWire Photo / Monica Nickelsburg)

The Seattle City Council unanimously passed a smaller version of the controversial “head tax” on Amazon and other top-grossing businesses that has sent shockwaves through the tech industry and municipal government over the past few weeks.

At an impassioned meeting Monday afternoon, the Council approved an amendment establishing the tax of $275 per employee per year, from $500 previously, on companies with more than $20 million in annual revenue in the city. The amendment is the result of a compromise reached between Mayor Jenny Durkan and several sponsors of the originally proposed tax over the weekend. Under the amendment, the tax expires after five years with the option to renew it.

The tax that passed Monday will raise close to $50 million annually to fight the homelessness crisis. The Council’s spending plan allocates 60-70 percent for affordable housing and the remaining funds will go toward shelters and other homeless services

Last week, Amazon said it would resume paused construction on one of its office towers if the Council approved a $250 per employee tax. That original compromise was voted down Friday.

“We appreciate Mayor Durkan’s efforts to significantly modify the Council’s ill-conceived proposal to tax jobs in Seattle,” said Downtown Seattle Association CEO Jon Scholes in a statement, after Durkan introduced her original compromise. “A tax on jobs at any level is bad economic policy and will negatively impact Seattle’s economy and city tax revenues.”

Whether Amazon will accept the new $275 per-employee cost remains to be seen. The company did not comment on the new compromise when GeekWire asked ahead of Monday’s meeting. Under the amended tax, Amazon will be on the hook for about $11 million annually, rather than the $20 million that the original …read more

Source:: GeekWire

      

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