13 June 2018 Seattle, Washington City Council votes to repeal the employer payroll tax The Seattle Washington City Council today voted to repeal the new employer payroll tax that was scheduled to take effect on January 1, 2019. As previously reported, Seattle Mayor Jenny A. Durkan on May 16, 2018, signed into law a new city ordinance that would have imposed the "Employee Hours Tax," a head tax on Seattle businesses with $20 million or more in taxable gross income. According to the mayor's news release, the new tax was to be used to help address Seattle's homelessness crisis. (EY Payroll Newsflash, Vol. 19, 096, 6-6-2018.) CB 119250 (signed Ordinance 125578) was a scaled down version of the previously proposed employer payroll tax that would have imposed a yearly surcharge of $500 per employee. The final version called instead for a yearly surcharge of $275 per employee. The tax would have applied to businesses with employees working in the city, regardless of whether the place of business is located within or outside of Seattle. The new business tax was expected to generate annual revenue of $47 million for use in funding programs to address homelessness and to build new affordable housing. Enactment in 2017 of an income tax on wages was ruled unconstitutional under a King County ruling. The city is appealing that ruling. The repeal comes after a coalition of Seattle businesses pledged to place a repeal referendum on the November 2018 ballot. (Reuters news article, June 12, 2018.) Washington State Senator Mark Schoesler also announced that he planned to introduce preemption legislation in 2019 that would ban localities from enacting employee hours or head taxes, like Seattle's Employee Hours Tax.
Document ID: 2018-1217 | ||||||||||||||
