FOLLOWUP: Read the proposed ‘Seattle Shield’ B&O tax change

Last week, when Mayor Harrell and citywide Councilmember Alexis Mercedes Rinck announced the B&O tax changes nicknamed “Seattle Shield,” the actual proposal wasn’t available to read. Tonight, it is. The first discussion is set for a council committee meeting on Wednesday morning; the Finance, Native Communities, and Tribal Governments Committee meets at 9:30 am, and its agenda has the full text of the draft ordinance as well as slide decks with key points of what it would do, such as a comparison of taxes that businesses pay now and would pay if the change is approved:

And what the revenue – estimated at $90 million – would go for:

The committee won’t be voting at this meeting. But they will take public comment, in person and remote – the agenda explains how to participate.

CEO July 1, 2025 (3:23 am)

Get ready for a bunch of Layoffs. Leadership is so disconnected from reality. Maybe the businesses will decide to leave. Not just the taxes but where the money is going. ” We have no solution so let’s just tax more.” Dumb/Stupid are their adjectives.

k July 1, 2025 (7:25 am)

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People always say this and it never happens, lol. Not because of modest tax increases. It also hasn’t made them move out of town en masse. Big rounds of layoffs are coming from organizations who rely on federal funding (cancer research, etc.). But the tech boys are still getting their handouts, so they’ll be fine.
- Yeah it won’t happen because they’ll just increase consumer prices genius July 1, 2025 (12:16 pm)
  
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  The people who buy the goods will go down because not all of us are corporate shills that work on the city council and can afford more price increases.
  - Nolan July 1, 2025 (1:20 pm)
    
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    Those words don’t really make sense in that order. Could you please re-phrase your argument?
Jay July 1, 2025 (9:55 am)

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Conservatives are being so dramatic over this. The numbers are right there on the chart, the tax increase is modest and it’s a tax break for most small businesses. I’d be shocked if this resulted in a single layoff as a direct result of this tax policy. And a relocation? No way. The jab at transgender people at the end is unnecessary and off-topic.
- Nolan July 1, 2025 (1:15 pm)
  
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  The jab is unnecessary, but I appreciate them telling us they’re a bigot. It’s useful info to have about a commenter showing up to complain about social services.

frank July 1, 2025 (9:42 am)

only politicians who have lived a salaried existence in government their entire lives would think taxing revenue is is a good idea. tax net income if you want equity. Imagine a low margin business like grocery stores now paying tens and hundreds of thousands more in taxes. why not call it the food tax. let’s not forget that the city of seattle also requires a business license of $143 to simply operate a business with $20,000/yr in revenue. That means someone mowing lawns, making under minimum wage as a self employed person still needs to pay them $143 per year. For the privilege of trying to make a living. Stop with the cutesy “Seattle Shield” name and layoff some city of Seattle employees.

Lagartija Nick July 1, 2025 (1:58 pm)

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Wait, you think paying $143 a year to make $20,000 is a burden? You’re the one out of touch.
- Charlie July 2, 2025 (9:55 am)
  
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  It’s not $20k in income, it’s $20k in sales. YAfter expenses you might make, what, $2k in net income? Even worse, you can lose money as a business and still owe taxes in WA and Seattle, thanks to our no income tax state, which forces a revenue tax model instead of profit. Imagine a grocery store which maybe has a 1% profit margin. You can do $100M in sales but still lose money, and your taxes will go up significantly in this proposal. So really it’s a tax increase on high volume, low margin businesses like grocery stores, gas stations, etc. Mostly businesses that serve low income customers. They will have to pass the increased cost on to customers.As a small business owner in all for the deduction, but there’s no need to try to increase government revenue here. You really want to help small businesses? At the very least make this revenue neutral and reduce the amount of the increase on the higher end

Erik July 1, 2025 (1:17 pm)

Thanks for reporting on this WSB! As a small business owner that constantly seems to straddle the line between just above and just below $100K, it will make things a little less stressful for me. This helps small business and asks large businesses to pay just a little bit more to make up for it. This would bring the highest grossing retailers up from a B&O rate of 0.22 percent to 0.34 percent based on the table provided, a very small change. While giving small business owners a bit of breathing room. We are already hit by huge Federal Income and FICA taxes. Bettering the lives of thousands of small business owners while making large businesses pay a small increase seems pretty fair IMO.

WS Res July 1, 2025 (2:50 pm)

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I’m confused. A business grossing $100K looks to me like it would pay nothing under this plan. Can you clarify?
- Adam July 1, 2025 (5:25 pm)
  
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  That was his point, that this will make it easier on him. I do find it funny tho that there’s a 50+% increase in the tax rate and he’s calling it a “very small change”. Btw, does anyone realize a company making $20k or $100k isn’t that money-grubbing Fortune 500 company they’re making it out to be? This town is hilarious. So yeah Nick, when a company makes $20k, absolutely a $143 added fee is substantial. We haven’t mentioned all the other ridiculous fees and taxes and inflated gas prices that company is subject to. And making $100k doesn’t make living in Seattle with Seattle prices easy. But you guys will all march through the blog comments with your “pay your fair share” adjacent opinions to small and very small business owners. And then demand higher wages to patronize their businesses. The vicious cycle of economic naivety
  - Lagartija Nick July 2, 2025 (1:10 am)
    
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    .007% is substantial?
  - Nolan July 2, 2025 (1:38 am)
    
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    You might find this helpful: https://www.wolframalpha.com/input?i=143%2F20000+in+percentage
  - Lauren July 2, 2025 (8:42 am)
    
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    Adam, you’re the one coming off as quite naive here ¯\_(ツ)_/¯
- Erik July 1, 2025 (6:33 pm)
  
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  Yes, that is correct. Deciding if I need to plan to pay an additional $500 in taxes for the year versus guaranteeing that I wont pay any would be nice. Not making it super political like Adam did LOL

Admiral-2009 July 1, 2025 (3:33 pm)

The city needs to change the threshold to $250,000 and make it a zero sum change, aka no increase in City revenue. It’s past time the City stop trying to solve regional challenges at City taxpayer expense!

Jake July 2, 2025 (9:45 am)

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Republican mindset is pretending Washington tax code isn’t regressive and inflation doensn’t exist.

Frank July 1, 2025 (7:44 pm)

Fiscal Accountability:
Where’s the business case that justifies this tax increase on large corporations? For example, how are current efforts falling short for homelessness prevention and how does more money solve the gaps? How will metrics be measured that shows this new revenue will actually change things?

Economic Impact Responsibility:
What analysis or private partnership efforts have been done to ensure potential downstream unintended consequences are mitigated or prevented (higher consumer prices and/or) job loss?

Nolan July 2, 2025 (1:40 am)

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Are you this rigorous every time any kind of revenue is raised for anything, or just when someone might be given housing?
Lauren July 2, 2025 (8:44 am)

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“Where’s the business case” I haaaaaate this argument. Government is not a business. The point is to help citizens. There should be transparency and accountability, sure, but all this corporate jargon? UGH.
And yes, I have both run my own business AND worked for huge corporations.
Jake July 2, 2025 (9:46 am)

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Business case? How about reaping insane profits on the back of cheap labor force of the region for one?