TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, June 14, 2018

NY Times: Seattle Officials Repeal Tax That Upset Amazon

Amazon logo (2018)New York Times, Seattle Officials Repeal Tax That Upset Amazon:

Seattle officials scuttled a corporate tax on Tuesday that they had wholeheartedly endorsed just a month ago, delivering a win for the measure’s biggest opponent — Amazon — and offering a warning to cities bidding for the retailer’s second headquarters that the company would go to the limit to get its way.

The tax would have raised about $50 million a year to help the homeless and fund affordable housing projects. As Seattle has boomed over the last decade, in large part because of Amazon, which is based there, rents have soared and some residents have suffered. The city’s homeless population is the third largest in the country, after New York and Los Angeles.

Taxing successful companies to help alleviate some of the problems that their success caused was such a compelling idea that it was quickly taken up in Silicon Valley itself. California cities like Cupertino, East Palo Alto, Mountain View and San Francisco have recently explored various forms of a head tax, under which large employers in each town would be charged a fee per employee.

But in Seattle, the notion has proved extraordinarily contentious, culminating in the abrupt reversal on Tuesday.

The Seattle City Council repealed the tax in a 7-to-2 vote that was accompanied by large doses of acrimony and despair. The crowd was standing room only, with some carrying posters that said “Tax Amazon Not Working People” while others supported repeal. The comment period was extended by the council members in a fruitless attempt to try to accommodate everyone. At least one Amazon employee spoke in favor of the tax, saying, “I want all kinds of people in this city, not just rich people.”

Less than a month ago, the tax had passed unanimously. It was signed into law on May 16 by Jenny A. Durkan, Seattle’s mayor, who said the money would “move people off the street and into safer places” and “clean up the garbage and needles that are in our parks and in our communities,” as well as provide resources including job training and health services.

http://taxprof.typepad.com/taxprof_blog/2018/06/ny-times-.html

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Comments

Not every tech company is a social justice warrior. Some just want to be techies and nerds. But politicians will never stop trying to tap new sources of money to address problems, real or imagined. And whether or not those problems are caused, in whole or in part, by the politicians themselves.

Posted by: ruralcounsel | Jun 14, 2018 9:24:20 AM

That was fast!

Posted by: Abe Carnow | Jun 14, 2018 6:58:53 PM

If there needs to be an additional tax lesson, you can bet that Amazon wasn't threatening to move to California.

Posted by: Woody | Jun 15, 2018 7:18:32 PM

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