The Seattle Metropolitan Chamber of Commerce will not continue to pursue a lawsuit against the city’s JumpStart tax initiative, after two years of opposing the payroll tax.
A lawsuit filed by the chamber in 2020 argued that the tax — which requires high-earning companies to pay an annual tax on salaries over $150,000 — argued that the tax was unfairly and illegally placed on people earning a living wage. After a King County court dismissed the suit in 2021, the chamber appealed to an appellate court, which in June deemed it was an “appropriate” use of the city’s taxing authority.
In a letter to members on Monday, president and CEO Rachel Smith said that the chamber will drop the case after discussions with legal counsel, members and the chamber’s executive board.
“We’ve decided the chamber will not appeal this recent court decision. Ultimately, with two lower court rulings against us, it is unlikely that there will be a different outcome for this legal strategy at the Washington State Supreme Court — and no guarantee the court will even accept this case,” the letter reads.
“Our top priority is advocating on behalf our members and their employees — and we will continue to work tirelessly on major issues like the city of Seattle budget, homelessness, public safety, and affordability,” Smith added on Thursday.
The tax, passed by the Seattle City Council in 2020, requires businesses with at least $7 million in annual payroll to pay between 0.7% and 2.4% on salaries and wages paid to Seattle employees who make at least $150,000 per year. The highest rate is applied only to salaries of at least $400,000 at companies with at least $1 billion in annual payroll.
In 2021, JumpStart brought the city $231 million in revenue, exceeding the city’s $200 million estimate.
Councilmember Teresa Mosqueda, who championed the tax, celebrated the chamber’s decision not to appeal during a news conference Thursday to announce housing developments that will receive JumpStart funding.
“We can do this in perpetuity now for the lifetime of JumpStart because those folks who were opposing it finally dropped their challenge and this week we see JumpStart continue to be the law of the land,” Mosqueda said.
Roughly $79 million in JumpStart revenue will go to 17 housing projects announced Thursday, helping to fund over 1,700 units of affordable and supportive housing across the city.