Seattle tax showdown with Amazon coming to a head

The mayor of Seattle may make the final call on whether to risk furthering Amazon's wrath by imposing a tax on the city's biggest employers to help pay for the city's efforts to confront homelessness.  

Amazon (AMZN) unexpectedly halted a large expansion in Seattle earlier this month, when the e-commerce giant said it would hold off until the outcome of a proposed tax that would affect it and about 600 businesses was known. Amazon on Monday declined further comment. 

The levy, which would apply to businesses that gross at least $20 million a year, would finance affordable housing and homeless services in a city with the third-largest homeless population in the U.S. Amazon's growth is viewed as a factor in the area's skyrocketing housing costs. 

The company, which employs more than 45,000 in Seattle, would be looking at an annual tab of up to $30 million and possibly more should the tax take effect as proposed, starting in 2019. 

Seattle City Council members on Monday narrowly defeated a scaled-back version of the proposed tax supported by Mayor Jenny Durkan. After rejecting the alternative, council members at a committee meeting voted 5-4 to put the tax on the full council agenda scheduled for later in the day.

If council members vote as they did to advance the tax, the mayor would then have to decide on whether to sign it into law, let it become law or veto it. Six council members would be needed to override a veto by Durkan.

The mayor has expressed concern about the potential ramifications on workers in the building and retail industries if Amazon permanently pulls the plug on its planned construction in Seattle. "At the same time, our city must urgently address our homelessness and affordability crisis," she added in a recent emailed statement. 

"I will continue to work with Council and remain hopeful that Council will pass a bill that I can sign," Durkan said in a statement issued Friday, before the compromise proposal was rejected.

Amazon has the backing of the Seattle Times editorial board, which has called the proposed tax a "symbolic 'eat the rich' gesture," that it contends would harm workers. Proponents argue that the proposal would help offset the state's tax code, which they claim stacks the deck in favor of the wealthy and against working people.