Last month, government and business interests collided when the Seattle city council voted to enact, and then repeal, the Employee Hours Tax (EHT), or “head tax law.” This political fight demonstrated that there are no easy answers when it comes balancing the needs and interests of all constituents. However, understanding some key takeaways from this battle can benefit all business owners.
History of the EHT
In May 2018, the Seattle legislature passed the EHT ordinance, hoping to raise an annual $50 million that would fund the city’s homelessness outreach services. The bill required that, for any company making more than $20 million a year, those businesses had to pay an annual tax of $275 per employee.
However, within days of the EHT’s passing, Seattle businesses formed a referendum campaign called “No Tax on Jobs.” With businesses like Amazon, Starbucks and Vulcan backing the effort, the campaign put city officials under tremendous political pressure. Less than a month after its passing, the Seattle city council didn’t wait for the ballot, and, instead, repealed the law.
Key Takeaways
Although there were strong arguments on both sides of the EHT debate, there were a few things that Seattle businesses did well that all companies can learn from:
Keep Lines of Communication Open
Seattle businesses and local government met multiple times throughout the debate to talk through solutions. Although those meetings didn’t end with a resolution initially, the businesses kept lines of communication open, and, eventually, they convinced city council members to change their votes and repeal the law.
Ban Together with Other Businesses
As the “No Tax on Jobs” campaign demonstrates, when faced with a local law that might harm your business, it is important to appeal to other businesses in your area—those are similarly impacted. When businesses combine resources, they can reach a common goal much faster.
Remember to Be a Good Neighbor
Although it seems like Seattle’s EHT debate was only about the tax on business, it was actually about the people in the community. Both local government and Seattle businesses have a vested interest in addressing the homelessness issue and protecting employee jobs. Despite the disagreement on how to solve the problem, both groups remained mindful of this.
Businesses in every community must recognize the importance of being a good neighbor. Without support from the community, your business will not thrive, no matter how many debates you win.
If your business needs help with a local government matter in your area, send us a message or call us at (314) 454-9100 today.
