Seattle Council Approves B&O Tax Overhaul Targeting Large Businesses, Voters Decide November

Seattle's City Council, led by Mayor Bruce Harrell and Councilmember Alexis Mercedes Rinck, has unanimously approved a significant overhaul of the city's Business & Occupation (B&O) tax, which will be decided by voters in November 2025. The proposal raises the tax exemption threshold from $100,000 to $2 million or even $5 million in annual gross revenue, exempting roughly 90-95% of businesses from the tax or reducing their burden, while increasing tax rates on the largest corporations such as Amazon and Starbucks. This initiative aims to generate approximately $81 million to $90 million annually to fund critical city services including food access, homelessness prevention, gender-based violence services, and support for workers' rights, especially amid anticipated federal funding cuts under the Trump administration. Proponents argue the tax restructure will protect small businesses, sustain vital city programs, and address inequality exacerbated by tech-driven growth, while critics caution it could harm economic recovery, increase business costs, and deter large companies from expanding locally. The measure, also known as the Seattle Shield Initiative, reflects ongoing debates about balancing fiscal equity with economic vitality, and must still pass voter approval to be enacted. Some council members and business groups call for more comprehensive budget reforms instead of increased taxes, highlighting tensions between revenue generation and economic competitiveness.