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Seattle leaders face raucous debate on Amazon tax rollback

Seattle leaders face raucous debate on Amazon tax rollback

June 13th, 2018 in Business

Demonstrators opposing the repeal of a tax on large companies such as Amazon and Starbucks that was intended to combat a growing homelessness crisis hold a sign that reads "Tax Amazon" as they wait for the start of a Seattle City Council meeting, Tuesday, June 12, 2018, at City Hall in Seattle. Members of the Council were expected to vote Tuesday on whether or not to repeal the tax. (AP Photo/Ted S. Warren)

SEATTLE (AP) — Angry people at a Seattle City Council meeting shouted for more time to discuss a vote Tuesday on repealing a tax on large businesses like Amazon that aimed to raise money to fight a homelessness crisis.

Supporters and opponents of the tax were talking for about an hour before Council President Bruce Harrell gave them more time. City leaders said they plan to repeal the tax just a month after unanimously approving it as they faced mounting pressure from companies.

The quick surrender showed the power of Amazon to help rally opposition and aggressively push back on taxes at all levels of government, even in its affluent home city where the income gap is ever widening and lower-income workers are being priced out of housing. It has resulted in one of the highest homelessness rates in the U.S.

Amazon and other businesses had sharply criticized the tax, and the online retailer even temporarily halted construction planning on a new high-rise building near its Seattle headquarters in protest.

Mayor Jenny Durkan and seven of nine City Council members said Monday they worked with a range of groups to pass a measure last month that would strike a balance between protecting jobs and supporting affordable housing.

However, a coalition of businesses is working to get a referendum on the November ballot to overturn the tax.

In a statement, Durkan and the council members said “it is clear that the ordinance will lead to a prolonged, expensive political fight over the next five months that will do nothing to tackle our urgent housing and homelessness crisis.”

They said they would move forward to repeal the so-called head tax.

It marks the latest Amazon move against city, state and national taxes.

The company recently said it would block Australians from purchases on its international websites after the nation planned to impose a 10 percent consumption tax on online retailers for goods shipped to Australia.

The tax debate comes as 20 cities vie to lure the company’s second headquarters and as it expands its workforce in Boston and Vancouver, British Columbia.

Cities have offered lavish tax breaks and incentives to lure the company and its promise of adding tens of thousands of high-paying jobs. Critics have said it is wrong for profitable company to push for public money, especially considering the added costs to infrastructure and services the new headquarters would bring.

Seattle’s tax would charge companies about $275 per full-time worker each year and raise roughly $48 million a year for affordable housing and homeless services. It would target businesses making at least $20 million in gross revenue and take effect in January.

The liberal city spent $68 million on homelessness in 2017 and plans to spend $78 million this year.

Just days after Durkan signed the ordinance into law, the No Tax On Jobs campaign, a coalition of businesses, announced it would gather signatures to put a repeal referendum on the November ballot.