Seattle voters will have their say this November on a sweeping overhaul of the city’s business-and-occupation (B&O) tax. The measure, part of the Seattle Shield Initiative spearheaded by Mayor Bruce Harrell and Councilmember Alexis Mercedes Rinck, would temporarily raise rates to generate roughly $81 million annually, aiming to help close the city’s $143 million budget shortfall.
If approved on Nov. 4, the revised tax structure would take effect in 2026 and run through 2029, with the option for the City Council to extend it through 2033. Under the proposal, about 90% of small businesses would see their tax bills reduced or eliminated entirely, with the exemption threshold raised from $100,000 to $2 million in gross revenue. That change would remove tax obligations for roughly 76% of current B&O taxpayers.
The initiative gained unanimous backing from the City Council last week, a move that surprised some observers given the presence of business-friendly moderates on the council. The decision came just before a political shake-up in Seattle, with primary voters advancing Rinck, seen as a labor-aligned progressive, in a landslide while Harrell trailed Transit Riders Union co-founder Katie Wilson.
Wilson said, she supports the plan and, if elected, would push for “a more thorough overhaul to make it more progressive so it’s not burdening those lower margin businesses as much.”
Revenue from the measure would fund affordable housing, shelters, food access programs, and services for survivors of gender-based violence. Proponents argue the plan asks larger corporations to contribute more while giving small businesses relief. Rinck has framed it as a choice for voters “to help small businesses stay open while ensuring the largest corporations contribute more to safeguard our city and residents.”
However, not everyone is convinced. The Downtown Seattle Association and Metropolitan Seattle Chamber of Commerce have argued the measure could discourage new businesses and slow downtown recovery. Similar criticism has come from business owners like Chad Mackay, CEO of Fire & Vine Hospitality, who says his restaurants could see a 12.5% increase in their Seattle B&O taxes. “It makes it very difficult to stay profitable in a city with ever-rising costs,” he noted, warning that some service businesses might relocate to neighboring cities like Bellevue.
Neighborhood business leaders, including JJ McKay of The Fresh Toast, have voiced concerns about the economic ripple effects. McKay said many in his network are alarmed by the rate hikes and are urging city officials to work more closely with local commercial districts. Tom Graff, president of Ewing & Clark and chair of the Belltown Business Association, added that shifting the tax burden to major employers can also harm small businesses that depend on those workers as customers.
The proposal arrives amid a mixed picture for Seattle’s economic recovery. While the Pike-Pine corridor and Waterfront Park have drawn crowds this summer, empty storefronts and persistent homelessness remain challenges. Whether voters view the B&O overhaul as a solution or a threat to that recovery will be decided at the ballot box in November.
