USA TODAY International Edition
Amazon’s aggressive side shows in Seattle tax fight
Similar battles could be on way in other cities
SAN FRANCISCO – If Seattle’s bitter public fight with Amazon over a new tax on employees is a sign of the future for cities vying to become the company’s next headquarters, there’s a take-home message: You can push Amazon, but you have to be prepared for it to push back — hard.
On Monday, Seattle’s city council unanimously passed a measure that will require companies with revenues of more than $20 million a year pay an annual $275 tax per employee despite strong pushback from Amazon — the city’s largest employer — and other large businesses including Starbucks.
The vote came after weeks of hearings, demonstrations, heated public meetings and a threat by Amazon to stop construction of its newest Seattle tower and pull out of leasing another.
The dispute ended in something of a draw Monday. For Seattle, the initial result should be another $45 million in the city’s coffers each year to build low-cost housing and to aid the homeless — problems many feel have been exacerbated by the influx of thousands of highly-paid tech workers at Amazon who have driven up rents and pushed out lower-income residents.
Though it passed, in many ways the final vote was a victory for Amazon. The original proposal had called for a $500-a-head tax on all Seattle businesses with more than $20 million a year in gross revenue.
The tax passed by the council was a compromise at slightly more than half that, though at $275 per employee it is still the largest head tax in U.S. history.
The company minced no words when the council voted.
“We are disappointed by today’s City Council decision,” Amazon vice president Drew Herdener said in a statement.
“We remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here.”
At the same time, it backed away from its previous threats to pull out of its most recent building project in Seattle, a 17-story office tower that will have 1 million square feet of office space and will house as many as 8,000 new employees.
It also said it would continue plans to lease the Rainier Square skyscraper which will have 720,000 square feet of office space when it is completed in 2020.
There had been concern Amazon might scale back hiring plans for Seattle, but that doesn’t seem to be happening.
According to the Seattle Times, in the two weeks since Amazon said it was going to stop its buildup in Seattle because of the tax, it has posted new ads for 547 new Seattle-based jobs. Currently, it has 5,700 jobs open in Seattle, up from 4,000 a few months ago.