A unanimous vote by Seattle City Council to approve a scaled-down head tax starting next year – equaling $275 per employee, per year for for-profit companies grossing $20 million annually – woke up Tacoma business leaders and sparked an overt reaction in the form of a 30-second video posted by the Tacoma-Pierce County Chamber on Facebook. The video message directly targets Seattle-based companies toying with the idea of setting up shop in the South Puget Sound, and touting the South Puget Sound’s business-friendly climate and no-tax-on-jobs policy.
The video, posted on Facebook on May 16, has since attracted 23,000 views and 304 shares (https://business.facebook.com/tacomapiercecountychamber/videos/1762752867094150).
It represents the first volley at Seattle, and was a precursor to Pierce County Executive Bruce Dammeier, on May 22, convening a press conference to announce to the region that the county is open to business and to publicly propose the creation of a county-wide family-wage jobs credit of at least $275 per new job generated after Jan. 1, 2019. The jobs credit in unincorporated Pierce County will be available to those businesses generating at least five new family-wage jobs, each paying $65,000 annually, in 2019.
Each city in the county will have the autonomy to establish the one-time credit in a specific manner unique to that community. Councils in those jurisdictions will make final approval of the one-time credit. City of Tacoma has made no grand gesture that it would create a specific jobs credit, citing a plethora of other credits already available to qualifying businesses.
“While I am not proposing any new credits … Tacoma has a history of incentivizing the creation of family-wage jobs, and businesses that create these types of jobs in Tacoma can already qualify for up to four different credits,” explained Tacoma Mayor Victoria Woodards.
To start, an employer can receive a $500 B&O tax credit every year for five calendar years if they add an additional full-time position to their workforce; pay that new employee a family wage, at minimum, as defined by the Washington State Employment Security Department; and keep that new position at least five calendar years. Should an employee leave that position, the employer has up to three months to refill it without any reduction in the credit.
Subsequently, should the employer qualify and receive the B&O tax credit then they also will receive up to three additional tax credits valued at up to $1,500 every year, for five calendar years. Employers can call the city’s tax and license auditor at (253) 591-5252 to find out what additional credits they can receive.
Tom Pierson, president and CEO of the chamber, said he has heard nothing specific from Seattle-based businesses since the distribution of the video. Two undisclosed companies have told Pierson they’re making plans to move their operations from Seattle to Tacoma by 2021.
“I’ve heard before and after the video of companies that want to move but aren’t making it public yet,” said Pierson.
Bruce Kendall, president and CEO of the Economic Development Board of Tacoma-Pierce County, has publicly said his phone has been ringing off the hook since Seattle City Council passed the head tax. It’s now widely known in business circles that companies in Seattle who have, for years, been passively looking into the possibility of moving to Tacoma and the South Sound are now seriously weighing their options.
“(The head tax represents) the last straw,” said Pierson. “I think we will be seeing a lot more movement in the coming months, and in the coming years. This isn’t something that will happen overnight.”