Seattle adopts spending plan for new payroll tax on big business

The Seattle City Council’s initial payroll tax spending plan. A new tax on Seattle’s highest-paying businesses will fund a variety of pandemic-related relief programs for renters, immigrants, refugees, and small businesses this year under a spending plan passed by the City Council on Monday.
Related: Seattle City Council unveils new payroll tax targeting Amazon and other large companies

The spending plan provides the most detail to-date on how Seattle’s new payroll tax will be used. The legislation, passed earlier this month , establishes a tiered tax on the payrolls of top salaries at companies that pay more than $7 million annually to employees.
In 2020, the plan is to borrow $86 million from existing city funds to provide rental assistance, services for immigrants and refugees, small businesses relief, and grocery vouchers. Those funds will be paid back with revenue collected through the payroll tax in its first year.
Seattle’s long-term spending plan for the payroll tax. After the coronavirus emergency passes, the payroll tax will fund affordable housing programs, small business assistance, and environmental and equitable development initiatives. The Seattle City Council estimates the tax will raise more than $214 million each year.
Long-term, Seattle expects to spend 62% of the tax revenue on affordable housing and related services.
The payroll tax is the latest of several attempts by the Seattle City Council to fund housing using some of the wealth generated by tech and other big businesses. In 2018, the city passed a per-employee tax with that purpose but repealed it shortly after faced with an opposition campaign led by the business community.