(Added: Seattle Channel video of afternoon announcement event)
11:40 AM: Another tax measure might be on the way to your November ballot, and this time it’s not a property-tax levy – it involves business taxes.
This afternoon, it’ll be announced by Mayor Harrell and citywide City Councilmember Alexis Mercedes Rinck, who call it the “Seattle Shield.” Excerpted from their advance announcement:
Today, Mayor Bruce Harrell and Councilmember Alexis Mercedes Rinck (Position 8, Citywide) announced a new proposal to lower city taxes for approximately 90% of Seattle businesses that currently pay the Business & Occupation (B&O) tax and raise needed new progressive revenue to protect funding to essential services and programs threatened by the Trump administration. …
The City of Seattle currently faces a $251 million deficit across all fund balances, with further financial risk stemming from Trump administration threats to federal funding and economic uncertainty. This proposal would temporarily raise B&O rates to bring in $90 million in net revenues for the City annually with funding dedicated to backfilling essential human services threatened by the Trump administration and maintaining effective ongoing City programs. These include investments in housing vouchers and shelter, food and nutrition access, services for survivors of gender-based violence, and more. With current financial forecasts, this revenue would also allow the City to protect and maintain needed investments in affordable housing. …
How the proposal works:
In 2026, the B&O tax exemption would be increased from $100,000 to $2,000,000, exempting approximately 16,500 small and medium-sized businesses (76% of current taxpayers) from the B&O tax. The City would also create the new B&O deduction, allowing all businesses to only pay B&O taxes on gross receipts above $2 million.
To offset the reduced B&O tax revenues caused by the exemption and deduction, and to address the deficit and Trump administration threats, the B&O tax rate will increase in 2026 from 22 cents per $100 of taxable receipts to 34 cents per $100 for retail, wholesale, and manufacturing companies and from 43 cents per $100 to 65 cents per $100 for service companies.
For the median taxpayer business that has $5 million in gross receipts, they would only pay the B&O tax on $3 million in gross receipts after the $2 million B&O deduction. In this example, their City B&O obligation would go from $15,200 in 2025 to $13,972 in 2026, a decrease of over $1,200.
For a business with $12 million in gross receipts – in the highest quartile of taxpayers – their B&O obligation would go from $31,920 in 2025 to $39,587 in 2026, an increase of $7,667. Approximately 90% of small and medium-sized businesses would see their tax obligation reduced or would be exempted altogether from the tax.
These changes would be effective for four years, from 2026 though 2029, with a councilmanic option to renew them for four additional years from 2030 through 2033.
This would require City Council and voter approval. We’ve asked for the full text of the proposal and will add that when we get it, along with any additional information emerging from the 1 pm event at which this will be officially announced.
5:38 PM: Adding the video from that event atop this story. The full text of the proposal isn’t available yet, so that might have to wait for a followup story. Here’s the entire news release, meantime.
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