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O’Ban and Schoesler introduce legislation in response to Seattle’s head tax debate

Last May, amidst the drama surrounding the Seattle City Council’s head tax proposal, Sen. Steve O’Ban announced plans to introduce a bill during the 2019 legislative session creating a “head tax credit.” This week, he introduced the bill (SB 5215), which had its public hearing in the Senate Financial Institutions, Economic Development and Trade Committee on Thursday.

The bill would create a $275 tax credit for newly created jobs in Washington counties where unemployment rates are at least 25 percent higher than the statewide unemployment rate. The “state business tax credit” would apply to full time jobs created after July 1, 2019, that offer annual wages exceeding the county’s average annual wage.  

“Some of our counties are really struggling economically and we need to take action to motivate employers to locate closer to the rural workforce,” said O’Ban in a prepared statement. “It’s fantastic that the Puget Sound has had so much growth, but we should spread opportunity and offer hope to every corner of Washington.”

“In addition to an eager workforce, these counties have lower taxes, lower costs of living and far less traffic and crime than the bigger cities,” added O’Ban. “We have nothing to lose by offering this incentive. It only applies to new jobs – not existing ones.”

Around the same time that O’Ban first announced plans for the job tax credit, Sen. Mark Schoesler proposed a bill that would outright ban employee hours taxes in Washington cities and towns. That bill, SB 5589, was introduced on Thursday and has since been referred to the Senate Local Government Committee.

Schoesler’s bill would add the following section to the revised code of Washington:

“A city or town may not impose a tax measured by employee wages, employee hours, or the number of employment positions, which is initially enacted on or after January 1, 2019.”

Despite the Seattle City Council’s decision to ultimately repeal the head tax, Schoesler committed to moving forward with his legislation
in June saying,

“I’m glad most members of the Seattle City Council had a flash of common sense and repealed their tax on jobs so soon after forcing it through…My bill will make it clear that any future taxing of jobs will be illegal. It’s wrong for Seattle, or any other city in Washington, to undermine the jobs working families depend on simply because of political ideology.”

A public hearing date has not yet been set for Schoesler’s bill.