On Saturday, the Seattle City Council unanimously voted 9-0 to advance the “Seattle Shield Initiative” for consideration by voters in the November 2025 election. The initiative aims to generate an estimated $80 million, with $60 million allocated to address the city’s anticipated $147 million deficit over the next two years.
The proposal includes a reduction of Business and Occupation (B&O) taxes for approximately 90% of local businesses while raising rates for those with gross receipts exceeding $5.7 million. Its primary focus is on preserving funding for emergency shelters, homelessness prevention, food access programs, and services addressing gender-based violence, while also providing financial relief to small and mid-sized enterprises.
Under the initiative, the B&O tax exemption threshold would increase from $100,000 to $2 million, alongside a standard $2 million deduction for all businesses. “This measure will ensure that the largest corporations contribute more to protect our city and its residents,” stated Councilmember Alexis Mercedes Rinck, who spearheaded the initiative.
For businesses in retail, wholesale, manufacturing, extraction, printing, and publishing that surpass the new threshold, the tax rate would rise to 0.342% until December 31, 2032, before decreasing to 0.273% in 2033. For service-related businesses and transport-for-hire companies, the rate would increase to 0.658% through 2032, followed by a reduction to 0.526%. Pediatric hospitals and comprehensive cancer centers would be exempt from these increased rates.
Rachel Smith, President and CEO of the Seattle Metropolitan Chamber of Commerce, expressed support for tax relief for small businesses but criticized the higher rates imposed on larger firms. She described the initiative as “rushed,” noting it did not consider a recent city revenue forecast that predicts an additional $90 million in revenue for the upcoming biennium. The City Council is set to begin its budget process for 2026 in late September after Mayor Bruce Harrell submits proposed adjustments.
