SEATTLE (AP) - The Seattle Chamber of Commerce has filed a lawsuit asking the courts to overturn a new tax enacted by the city that would collect revenue based on how much employees make at some of Seattle’s biggest employers.
The “Start Up Seattle Tax” was passed by a veto-proof majority of the City Council last July and affects about 800 Seattle businesses with payrolls of more than $7 million. The suit says the tax is illegal and unconstitutional, KOMO-TV reports.
The ordinance would require companies to pay the tax based on their employees’ annual salary. The tax, which takes effect on Jan. 1, would be paid by the company on behalf of Seattle-based workers who earn over $150,000 annually.
It is designed to replenish $86 million the city spent for emergency COVID-related expenditures in 2020, then raise additional millions of dollars for other purposes, including funding an equitable development initiative and supporting a New Green Deal.
According to the council’s calculations, the tax is projected to raise $214 million in 2021 and $219 million in 2022. But the lawsuit argues the measure is actually a “tax on the right to earn a living,” which the state Supreme Court has ruled that cities may not do, according to the suit.
The suit also argues that the timing of the tax, in the midst of the COVID-19 pandemic, could derail Seattle’s shaky economic recovery.
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