Eliminate the Corporate B&O Tax Break for International Investment Corporations

Home » Eliminate the Corporate B&O Tax Break for International Investment Corporations

Washington State has the most regressive tax system in the entire nation. Every year, my fellow City Councilmembers lament the failure of the state legislature to put in place progressive taxes to fund basic needs like education, affordable housing, healthcare, and social services.

While I fully agree, Councilmembers have a responsibility to fight for every possible progressive revenue source that can be won at the City level. That is why, ever since I took office, my staff and I have explored how the City can tax the rich and progressively raise revenue to fund the many urgent needs of Seattle’s working people and those who are marginalized.

With the help of City Attorney staff, my office has discovered a corporate tax break for international investment corporations in the City’s Business and Occupation (B&O) tax. The tax break was passed unanimously by the City Council in 2009, including current Councilmembers Burgess and Harrell. As The Stranger reported, “the council created the lower rates for those firms in 2009 in an effort to lure Tacoma-based Russell Investments to Seattle.” Then Deputy Mayor Tim Ceis had the audacity to argue, “We’re not giving anything away. We’re just saying, ‘Here is what we believe is a fair way to deal with you.’”

Over the last seven years, because of this tax break, the City has lost millions in revenue that could have been used for socially beneficial causes, such as services for the homeless and survivors of domestic violence, or for tenants’ rights organizing. It has also outrageously meant that small independent coffee shops are paying a higher B&O tax rate than corporate financial investors.

I have brought forward an amendment to the City budget this year to eliminate this tax break, which is estimated to be able to raise an additional $2 million a year.

Our movement should hold the Council accountable to ensure that we have a unanimous vote in ending this blatant corporate welfare.