A court battle over Seattle’s new tax on high salaries at large corporations will continue, with a business group doubling down on its lawsuit against the tax.
A King County judge dismissed the Seattle Metropolitan Chamber of Commerce’s suit against the “JumpStart” tax last month, leading City Council members who passed the measure last year to declare victory.
On Friday, the chamber announced an appeal of that ruling, asking the Washington State Court of Appeals to overturn the decision.
The business group argues JumpStart is an illegal tax on employees and their right to make a living, while Seattle’s lawyers say the measure is a tax on employers and their business activities.
“Our success in this lawsuit wasn’t in doubt, considering the Legislature’s express authorization to impose a progressive tax like this,” City Attorney Pete Holmes said last month after Judge Mary Roberts tossed out the suit.
“This is an important legal issue to resolve and this needs to be reviewed by the Court of Appeals,” Chamber President Rachel Smith said Friday.
JumpStart took effect this year, with Mayor Jenny Durkan and the council relying on more than $200 million in expected proceeds to patch pandemic-related holes in Seattle’s 2021 budget and provide relief to residents. Starting in 2022, much of the money has been earmarked for affordable housing.
The measure calls for businesses with at least $7 million in annual payroll to be taxed 0.7% to 2.4% on salaries paid to Seattle employees who make at least $150,000 per year. The top 2.4% rate, meant to apply to companies like Amazon, taxes salaries of at least $400,000 at companies with at least $1 billion in annual payroll.