Corporate Donations Power Seattle Head Tax Repeal Campaign

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By Paul Shukovsky

An initiative campaign to repeal Seattle’s recently enacted tax on employee head count has picked up steam on the strength of donations from major employers including Amazon.com Inc. and Starbucks Corp.

Paid and volunteer signature gatherers fanned out across the city over the Memorial Day weekend to begin collecting the roughly 18,000 signatures needed by June 14 to put the No Tax on Jobs initiative on the November ballot.

The initiative petition calls for the repeal of an ordinance that will impose an employee hours tax beginning Jan. 1, 2019, on businesses with annual incomes exceeding $20 million—levying a tax of about $275 per year for each full-time employee based on a rate of $0.14323 per hour worked. It is expected to generate about $48 million in revenue from around 585 companies, about 3 percent of those doing business in the city.

The revenue will be used to address Seattle’s burgeoning homelessness problem, stoked by the influx of tens of thousands of well-paid tech workers who have pushed up housing prices.

Donations Roll In

In the approximately two weeks since the measure passed and the No Tax on Jobs campaign registered as a committee, it has received contribution pledges of $352,775, according to a Seattle Ethics and Elections Commission filing.

The highest donation of $30,000 was from the Washington Food Industry Association, a statewide trade association of independent supermarkets, convenience stores, and coffee houses. The low-margin supermarket industry has frequently been called particularly vulnerable to the tax, and supermarket giants The Kroger Co. and Albertsons Cos. Inc. each pledged $25,000.

Also pledging $25,000 were: Amazon, which has more than 45,000 employees in its headquarters city of Seattle; Starbucks, also headquartered in Seattle; Microsoft co-founder Paul G. Allen’s Vulcan Inc.; and space needle owner Howard Wright.

“We’ve have had continuous interest, both in volunteer and financial support,” campaign spokesman John Murray told Bloomberg Tax May 31. He said additional contributions will be listed in a coming filing to the city election commission.

Murray declined to disclose how many signatures have been gathered so far. “We feel confident about meeting that target,” he said. “All reports and indications are that we are better than on track.”

To contact the reporter on this story: Paul Shukovsky in Seattle at pshukovsky@bloomberglaw.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bloombergtax.com

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