In June 2025, Seattle leaders proposed temporarily eliminating the city’s business and occupation (B&O) tax for businesses with gross receipts of $2 million or less, while raising the rate for larger service businesses on receipts above that threshold. The proposal drew criticism over its potential effect on companies and the city’s commercial tax base; Amazon declined to comment at the time. Seattle voters later approved Proposition 2 in November 2025, according to GeekWire’s report citing unofficial returns. The available coverage does not establish the final effective date or every implementation detail.
What Seattle’s B&O proposal would change
The measure concerns Seattle’s city B&O tax, which is based on gross receipts attributable to business activity within city limits—not on profit. A business can owe the tax even when it is not profitable, according to GeekWire’s June 2025 report: coverage of the proposal.
The proposal paired relief for businesses at or below a $2 million gross-receipts threshold with a higher rate for service businesses above it. GeekWire reported the following figures in its June proposal story and November election follow-up:
| Element | June 2025 proposal coverage | November 2025 vote follow-up |
|---|---|---|
| Businesses with gross receipts of $2 million or less | Temporary elimination of the city B&O tax, as described by GeekWire. | GeekWire reported the same general threshold and relief structure. |
| Service-business rate above the threshold | Proposed increase from 0.427% to 0.65% on revenue above $2 million. | GeekWire repeated the 0.427% and 0.65% figures and the above-threshold application. |
| Estimated additional annual revenue | $90 million, reported at the proposal’s unveiling. | $81 million, reported in the post-vote story; the coverage does not explain the difference. |
| Expected small-business tax impact | The city said about 90% of small and medium-sized Seattle businesses would pay less if the proposal passed. | Not stated in the cited November follow-up. |
The $90 million and $81 million figures are separate estimates reported at different points, not interchangeable totals. The available coverage does not provide a primary city fiscal analysis that reconciles them.
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Why supporters backed the proposal
Supporters described the measure as a way to reduce the tax burden on smaller businesses while raising money for human services and other city programs. At the June announcement, the city’s reported estimate was $90 million in additional revenue each year. Supporters also pointed to the prospect of federal funding cuts and a reported city deficit.
Councilmember Alexis Mercedes Rinck argued that larger companies benefited from Seattle’s infrastructure, workers, and consumer base, and should contribute to the community that helped them succeed. She described that obligation as “shared community responsibility that comes with shared success,” according to GeekWire’s June report.
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Why business groups and executives objected
Critics agreed that small-business relief had value but disputed whether raising the tax on larger service businesses was a sound way to pay for it. Their concerns focused on business costs, employment and office-market uncertainty, and the possibility that companies could relocate or otherwise weaken the city’s commercial tax base.
Downtown business concerns
Jon Scholes, president and CEO of the Downtown Seattle Association, called the proposal “a boneheaded proposal of epic proportions.” He warned that a higher tax on larger companies could undermine Seattle’s commercial tax base and eventually shift more of the tax burden to residents, as GeekWire reported.
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A free scan shows the junk files, broken settings and background clutter dragging Windows down - then fixes them in one click.Free scan · Windows 10 & 11Mayor Bruce Harrell rejected the suggestion that the city intended to drive businesses away, saying, “We are open for businesses.” Rachel Smith, president and CEO of the Seattle Metropolitan Chamber of Commerce, also supported small-business relief but argued that the city should find another funding source, given concerns about employment, office vacancies, and economic uncertainty.
Technology and corporate perspectives
Expedia’s senior director of government affairs for North America, Richard de Sam Lazaro, said the company appreciated the opportunity to help make Seattle and its small-business community more resilient while remaining mindful of the impact of additional taxes. Washington Technology Industry Association CEO Kelly Fukai welcomed the relief effort but cautioned that technology startups are not traditional businesses and might face inequities from tax policies. She said startups were struggling to assess the combined effects of recent tax changes.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What Amazon’s silence does—and does not—show
Amazon declined to comment when asked about the June 2025 proposal. That silence does not establish whether the company supported or opposed Proposition 2.
GeekWire placed the dispute in a longer history of tension between Amazon and Seattle over business taxes. Amazon opposed the city’s 2018 per-employee payroll tax, which the City Council repealed that year. In 2020, Seattle adopted the payroll expense tax, also known as JumpStart, which applies to large companies meeting an annual payroll threshold. Those earlier disputes provide context, but they do not establish Amazon’s position on this B&O measure.
Who might ultimately bear a higher tax cost?
The proposal set up competing possibilities rather than a settled outcome. Companies could absorb higher costs, pass some of them on to customers, or respond in ways that affect investment and Seattle’s commercial tax base. None of those effects is established by the cited coverage.
University of Washington Evans School professor Jacob Vigdor told GeekWire that Amazon might react negatively, but could also pass costs to consumers. As an example, he pointed to app-based delivery services adding fees after Seattle adopted new regulations for delivery drivers. That is a possible analogy, not evidence that Amazon would add a surcharge or that every affected business would pass the tax along.
What happened at the ballot box
GeekWire reported on November 4, 2025, that Seattle voters approved Proposition 2. The article cited 67.7% support in unofficial King County returns at the time; that figure should not be read as a certified final result. The same follow-up reported an annual revenue estimate of $81 million, distinct from the $90 million estimate reported when the proposal was announced in June.
The available reporting does not establish the measure’s final effective date or all implementation details. Businesses seeking to determine their obligations should consult current Seattle tax guidance rather than assume the proposal-era description answers every compliance question.
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