Proposal would protect critical investments from Trump’s threats while lowering taxes for small- and medium-sized businesses
Seattle – Today, Mayor Bruce Harrell joined Councilmember Alexis Mercedes Rinck (Position 8, Citywide) and small business leaders, human services providers, and labor advocates to sign legislation that will place a proposal on Seattle voters’ ballots to lower taxes for approximately 90% of Seattle businesses that currently pay the City Business and Occupation (B&O) tax and raise needed new progressive revenue to protect funding for essential services and programs threatened by the Trump administration.
The legislation was unanimously passed by the City Council on Monday.
“This is a significant win for Seattle’s small businesses and our broader community. By reducing taxes for 90% of businesses, we are helping local entrepreneurs thrive and compete while ensuring they can continue to contribute to the fabric of our neighborhoods,” said Mayor Harrell. “At the same time, this legislation secures critical local funding, safeguarding essential human services and programs that our residents rely on, especially during a time of uncertainty surrounding federal funding. This balanced approach underscores our One Seattle commitment to both economic growth and community resilience.”
“Today the City of Seattle proudly took action to protect critical programs that working families and our most vulnerable neighbors depend on by sending the Seattle Shield Initiative to voters for the November ballot,” said Councilmember Rinck. “Now, voters have the choice this to give small businesses relief and help them stay open. These are the coffee shops where they get your oat milk latte just right, the family restaurants where they know you want 3 stars on your pad thai, and the bookstore that has staff recommendations on what you should read next. In turn, this measure will ensure the largest corporations contribute more to safeguard our city and residents from the cruelty and chaos created by the Trump Administration and Congressional Republicans.”
The City of Seattle currently faces an approximately $143 million revenue shortfall across all fund sources per the most recent forecast, 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 approximately $81 million in net revenues for the City annually with funding dedicated to backfilling essential 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.
The proposal would raise the B&O tax threshold exemption from $100,000 to $2,000,000 in gross revenue and create a new B&O deduction up to $2,000,000. About 76% of current B&O taxpayers – small and medium sized businesses – would no longer owe the tax, and approximately 90% of businesses would owe less than they do today.
B&O tax relief has been highlighted by small business leaders as a way to support Seattle’s economy, make the city more competitive with neighboring jurisdictions, and help small businesses thrive.
The proposal will require approval by Seattle voters in the November 2025 general election.