Last week, Seattle Mayor Bruce Harrell unveiled a comprehensive package of policy reforms and budget proposals aimed at supporting small businesses across the city. The announcement, part of the mayor’s proposed 2026 budget, includes significant changes to the city’s tax code, permitting processes, and direct financial support for local entrepreneurs.
Joined by Council President Sara Nelson, Office of Economic Development Director Markham McIntyre, and small business owners, Mayor Harrell outlined a series of initiatives designed to reduce costs, remove bureaucratic hurdles, and accelerate economic recovery for small businesses. The proposal includes a rewrite of Seattle’s Business and Occupation (B&O) tax that would exempt 90 percent of small and medium-sized businesses, a $5 million expansion of the Back to Business program, and new permitting legislation intended to streamline and simplify business operations.
Harrell says that small businesses are central to Seattle’s economic and cultural identity.
“Seattle’s small businesses are the heart of our neighborhoods and the backbone of our economy,” said Harrell. “By cutting red tape, lowering costs for small businesses, and expanding access to capital, we’re helping entrepreneurs open, grow, and keep our communities vibrant.”
The reforms are anchored by the Permitting Accountability and Customer Trust (PACT) Executive Order, which will create clearer, faster permitting processes. PACT includes a multilingual online guide and introduces a pilot artificial intelligence tool to reduce application errors and processing delays. Additional legislation shortens permitting timelines and lowers costs for businesses moving into long-vacant storefronts.
McIntyre says that the reforms address an urgent need for action.
“Small businesses are at a tipping point for survival in Seattle for multiple reasons. Our small businesses define our city’s character — they shape our neighborhoods, power our economy, and reflect and enhance our culture. The City needs to act to ensure small businesses survive and thrive,” said McIntyre.
“We listened to what small businesses need right now and we have delivered results. There’s more to do, but this package demonstrates that we are listening and we are acting.”
Sound Transit 3 relocation support is also part of the plan. Under House Bill 1733, the City advocated for and supported an increase in relocation reimbursement from $50,000 to $200,000 for businesses displaced by construction projects.
Keith Tucker, founder and executive director of Hip Hop Is Green, says one of their projects faced significant permitting delays that increased project costs, and that expanded city support is essential for innovative community projects to succeed.
“Through our urban teaching farm, young people gain insights into ecology, the effects of climate change, and hands-on experience growing food,” said Keith Tucker, founder and executive director of Hip Hop Is Green. “We faced significant hurdles and multiple delays during the permitting process for Cherry Street Farm, which ultimately drove up our costs. The City’s increased support for innovative projects like Cherry Street Farm is essential in overcoming such obstacles, ensuring that we can continue to serve our community and promote sustainable practices.”
The tax reform proposal, which requires City Council approval, aims to reduce or eliminate the B&O tax burden for most small businesses while maintaining progressive revenue sources to offset federal funding losses and preserve essential city services.
Nelson says that the city must go beyond recovery and focus on keeping small businesses in Seattle.
“It’s not enough to get our Seattle entrepreneurs and workers back to business — we have to keep them here,” said Nelson. “This package of reforms and critical investment shows our urgent commitment to supporting local businesses — something I’ve worked hard for during my time on the Council. I am proud of all of the work we have done to help small businesses, and I am thrilled to see the level of investments in small businesses the Mayor has proposed for the 2026 budget.
“I want to thank the Mayor’s Office and our local business community for their partnership in this work. Moving forward I will continue to fight for more no-brainer changes like these, while also exploring new innovative solutions,” added Nelson.
The Back to Business program, proposed to receive $5 million over two years, would continue to offer direct aid and technical support to businesses still recovering from the economic impacts of the pandemic, vandalism, and changing market conditions. The overall strategy aims to lower barriers, increase access to preventive resources, and tailor city investments to meet the unique needs of local entrepreneurs.
The City Council is expected to review the tax proposal and Back to Business funding in the coming weeks.
