Crowd packs City Council hearing on Seattle's proposed 'head tax'

Supporters and opponents packed the Seattle city council's chambers Monday night for public comments at a hearing on the city's proposed head tax. (Photo: KOMO News)

SEATTLE - Some of Seattle's biggest businesses could get hit with a proposed head tax.

Supporters claim the tax would raise $75 million a year for five years and would help pay for some affordable housing and homeless services.

"By addressing some of our social ills and our challenges with homelessness, this is going to make it a better place to do business," Seattle Councilmember Lisa Herbold said Monday.

Supporters and opponents packed the city council's chambers Monday night for public comments.

But, things got fired up pretty quickly. At once point the crowd got so boisterous that many were forced to wait outside the chambers.

Speakers were allowed back in a few at a time to voice their views.

Eventually everyone was let back into the chambers on the condition they all remained calm.

Supporters say $15 million a year would go toward a variety of homeless services like hygiene centers, camp cleanups and trash pickup. About 75 percent of the tax, or roughly $57 million would also fund the construction of nearly 1,800 affordable housing units.

The tax will apply only to companies with $20 million or more annually in taxable gross receipts, as measured under the City’s Business and Occupation tax. The city estimates that will be about 500 businesses.

One business owner told KOMO News on Friday he's upset the tax would be based on total revenues and not net-income.

“We don't make $20 million a year, those are gross sales,” said Todd Biesold, CFO for Merlino Foods. “They have no idea what my margins are compared to someone else. This is the grocery business, margins are low, so it's just not fair.”

He said his business employs roughly 100 workers.

The first two years of the tax would mean businesses like Merlino would pay $.26 per hour per employee with a $500 maximum per year.

“That’s $50,000 for us, I’m not sure where we are going to get the money to pay for that,” said Biesold.

POLL: Should big businesses have to pay for homeless services/affordable housing? Answer the poll below or click here.

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