Originally published November 13, 2009 at 12:33 PM | Page modified November 13, 2009 at 2:46 PM

Budget committee votes to ax Seattle's 'head tax'

Seattle is axing its controversial "head tax," which charges most local businesses $25 per employee to help fund city transportation projects, such as streets and sidewalks.

By Jack Broom

Seattle Times staff reporter

Seattle is axing its controversial "head tax," which charges most local businesses $25 per employee to help fund city transportation projects, such as streets and sidewalks.

The City Council's Budget Committee Thursday, despite a shortage of revenue, voted to repeal the tax, which raised about $4.5 million last year.

Critics, including unsuccessful mayor candidate Joe Mallahan, had argued that the tax, created in 2006, discourages businesses from creating jobs or locating in the city.

In June, Mayor Greg Nickels and some council members announced they planned to repeal the tax. Councilmember Tim Burgess said at the time that besides being a burden, the tax was difficult to administer. Employees who commute by transit, carpool, bicycle or on foot were exempt, and there was a complex formula to determine the amount businesses pay for part-time employees.

Jack Broom: 206-464-2222 or jbroom@seattletimes.com

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