Speculation that Seattle’s new head tax could be a boon for neighboring cities has been swirling since before the City Council approved the controversial legislation Monday afternoon. After all, what’s to stop a company from moving just outside of Seattle city limits to tap the same talent pool with a lower tax bill?
John Chelminiak, mayor of Bellevue, Wash., said the issue is a little more nuanced than that in an interview with GeekWire Tuesday. He stressed one of his city’s key pillars, “Bellevue is open for business” but expressed concern over the message the tax sends about the broader Seattle metropolitan region.
“That is the key issue,” he said. “What message is it sending? People recognize Seattle as the hub of this area. If you’re out selling yourself somewhere, you’re going to say that you’re in the Seattle area because people recognize the name Seattle.”
On Monday, Seattle passed a per-employee tax of $275 each year on businesses grossing more than $20 million annually. It was the end of a political saga that highlighted deep divisions between Seattle’s business community, government, labor groups, and housing activists. Although the final tax is smaller than the $500 per-employee price tag originally under consideration, businesses like Starbucks and Amazon have already condemned the legislation.
“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,” Amazon exec Drew Herdener said in a statement.
Some supporters nicknamed it the “Amazon tax” because the tech giant will be the largest source of revenue through the new levy, about $11 million/year.
Last week, as the head tax debate raged, reports surfaced that Amazon is gearing up for a major expansion in Bellevue. The e-commerce giant is reportedly close to taking over the building housing Expedia’s corporate headquarters when the travel giant moves to Seattle and another Bellevue office tower.
Chelminiak said that he is not aware of any businesses changing their plans in the region as a result of Seattle’s new head tax.
“Businesses make their decisions on where to locate based on lots of different data points,” he said. “One of those is the tax system, but they make that decision based on a number of different data points. From my perspective, if there is someone who wants to move within the region, our doors are certainly open to them in Bellevue but … we want to make sure that we show that the Puget Sound region has a really strong economic climate.”
Bellevue is already home to a number of large tech companies, including Concur, Smartsheet and Valve. Also, Silicon Valley giants such as eBay and Salesforce operate engineering centers in Bellevue.