The Bellevue Chamber of Commerce recently shared a helpful breakdown of Seattle’s proposed business tax changes and what that could mean for companies in the region. Here’s a look at how Seattle’s plan compares to Bellevue’s approach.
As Seattle leaders consider big changes to the city’s Business & Occupation (B&O) tax, people are starting to compare it to nearby cities like Bellevue—especially in how each city supports local businesses.
In June, Seattle officials announced a new plan called the Seattle Shield Initiative. It would raise the amount a business can earn before paying the B&O tax from $100,000 to $2 million removing the tax for many small businesses. For businesses making more than $2 million, the tax rates would increase greatly.
For example, under the new Seattle plan:
- A company with $10 million in annual receipts would owe about $45,500.
- A company earning $100 million would owe around $630,500.
Those amounts are significantly higher than what similar businesses would pay under Bellevue’s current B&O tax:
- $10 million in receipts would result in a tax of $15,960.
- $100 million would be taxed at $159,600.
Developers could also see a large cost difference. Building 100 housing units in Seattle could mean paying roughly $200,000 in B&O tax under the proposal, compared to about $50,000 in Bellevue.
Seattle leaders say the new tax plan could bring in about $90 million each year to help close the city’s budget gap and support public programs like housing, food access, and shelters. Supporters believe it creates a fairer system by shifting more of the tax responsibility to larger companies, while others are concerned it might lead businesses to grow elsewhere in cities with more predictable tax policies.
Unlike Seattle, Bellevue hasn’t proposed any new business tax increases. The city uses a simple, flat B&O tax rate and isn’t dealing with a budget gap. Many business owners see this straightforward approach as a major benefit.
Joe Fain, President and CEO of the Bellevue Chamber of Commerce, commented on the Seattle proposal shortly after it was introduced. While he acknowledged Bellevue might see more business interest as a result, he expressed concern about the broader implications for the region.
“We are one region, and Seattle is our brand,” Fain said. “What’s bad for Seattle is bad for Bellevue.”
He also pointed out that some policymakers seem to think big companies can easily be replaced, but he believes most people understand how important these businesses are to the local economy.
Seattle voters are expected to weigh in on the proposal this fall.
