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Seattle Passes Head Tax on Large Employers

On May 14, 2018, the Seattle City Council voted in favor of a 14 cent tax per employee hour worked within the city. This equates to a tax of about $275 per employee, per year. The tax applies to for-profit companies that gross at least $20 million in the city and is effective for 2019.

Since the tax is applied to employee hours and on business conducted within the City, it can also apply to companies located outside the city limits

It is estimated that 3% of Seattle businesses will be taxed, resulting in about $47 million of tax revenue per year. The revenue raised by the tax will be used to help address homelessness by building housing and providing health services within the city.

Mayor Jenny Durkan has indicated that she will sign the new tax ordinance into law. Once the final version of the law is available, further information will be provided on the full effect to businesses.

If you have any questions, please contact your tax professional at Berntson Porter at 425.454.7990. We’re here to help!