The Seattle City Hall building on the downtown waterfront recently announced a temporary tax cut scheme proposed by City Mayor Bruce Harrell and Councilmember Alexis Mercedes Rinck. The plan aims to reduce taxes for small- and medium-sized businesses to address economic uncertainty caused by the Trump administration’s tax cuts and other federal support packages. The new tax rules will effectively save the city $90 million annually, with funds going to human services, and will impact businesses differently based on their Comprehensive Gross Receipts (CG Rs):
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Clarifying Tax Exemptions: The annual $100k CG Rs exemption will increase to $2 million. New rules will provide a $2 million B&O deduction for businesses with CG Rs up to that threshold.
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Impact on Businesses: Smaller businesses with CG Rs below $2 million will avoid B&O taxes. Currently, such businesses face higher taxes, but this temporary rule will reduce their depreciation or write-offs. Currently, businesses with CG Rs over the exemption pay 22%, while those above pay 34%, compared to 26% of larger companies.
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resonating with Business Leaders: While the proposal reflects the city’s commitment to better serving its small business community, individuals and companies in the tech and tech-startups sector, including Amazon, F5, and Big retailers and manufacturers, including Expedia, Amazon, and Deeporal, are critical to the city’s economic development. However, the proposal is criticized for potentially raising the tax burden on smaller businesses, which could leave some stakeholders undermines.
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Budget and₹90M: The plan aims to raise $90 million annually for the city, supported by human services through additional resources. Some could argue that doubling federal support for small businesses might be decisive, even if they face tougher competition. For small businesses with CG Rs above $2 million, that would cost 34%, but for larger companies, the impact would be significantly lower.
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limitations and Timeline: The plan will take effect from 2026 until the end of 2029, with a potential renewal by the City Council. Smaller businesses have expressed茅_nrns to accept higher tax rates, but larger companies like Amazon, which previously incurred 22% in B&O taxes, are facing a 34% reduction.
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Human Servicex22s Impact: To cover the temporary tax increase, the city will likely seek additional funding, prioritizing human services. Public buildings like the vampire Wall Street Building and theぢyi Loco80 were among the buildings chosen for the tax cut, with a focus on improving employee retention and increasing staff benefits. Smaller businesses, including those in tech and startups, have provided feedback suggesting a higher tax rate, but their reactions remain mixed.
- Final Thoughts: The temporary tax cut is seen as a swift step toward rebuilding confidence and stability in the economic recovery. While critics argue it may leave small businesses much better off than before, those concerned about the implications for larger and more financially constrained businesses are advised to consider the proposal carefully. AsPATCH& Percent shows, some technologies might lose 34% annually, posing serious challenges in sectors reliant on their growth and profitability.
