OLYMPIA, Wash. — The Washington State Court of Appeals upheld Seattle's pandemic-era payroll tax that faced opposition from the Greater Seattle Chamber of Commerce.
On Tuesday, the court concluded that the payroll expense tax, also known as the "JumpStart tax," is an excise tax on businesses and within the city's powers to impose.
"Engaging in business is a substantial privilege on which the city may properly levy taxes, and the use of a business's payroll expense is an appropriate measure of that taxable incident," judges wrote in their decision.
In a statement, Seattle Metro Chamber President and CEO Rachel Smith said the Chamber will review the decision and determine "our next step in consultation with our members and our attorneys."
The tax applies to companies who spend more than $7 million in payroll, issuing a 0.7% tax for companies that offer employees more than $150,000 but less than $500,000 a year and a 1.4% tax on companies paying employees more than $500,000 annually.
The tax was proposed by Seattle City Councilmember Teresa Mosqueda as a way to generate funds that could help the city and small businesses withstand the financial woes of the COVID-19 pandemic.
The tax brought in $231 million by mid-February – about $31 million more than forecasted.
In April, the tax was projected to bring in more than $277 million in 2022, $43.6 million beyond what was anticipated in November, according to information from Mosqueda's office.
