Seattle’s Head Tax Makes its way to Olympia

February 3, 2020

HB 2907 was introduced last week and would allow counties with populations over 2 million to impose an excise tax on business, including sole proprietors. Only King County exceeds the population threshold. The tax, which would be .1% to .2% on a company’s total payroll, could raise $120 million. Companies won’t have to pay the tax if all of their employees make less than $150,00 per year. For companies that have a mixture of workers making above or below that amount, the lower-paid employees’ salaries would be deducted for the purposes of tax calculations.

Grocery business, as well as small businesses with 50 or few employees, are exempt if at least half of their employees make less than $150,000. These monies could be used for housing, including affordable units, supportive housing, and rental assistance. Additionally, it can be used for homeless shelters and interventions that prevent homelessness, including behavioral health treatment.

Under the proposed law, voters would not have to approve the new tax. It would be passed by ordinance, which King County Dow Constantine supports.