Council reviews 'Shield Seattle' B&O tax restructure as advocates and businesses clash

The Select Budget Committee heard hours of testimony and a staff briefing July 16 on council member Mercedes Rink’s Seattle Shield proposal, a ballot referral that would restructure the city’s business-and-occupation (B&O) tax and, if approved by voters, is projected to raise about $90,000,000 a year while exempting most very small businesses.

The proposal would boost the small‑business exemption from $100,000 to $2,000,000; create a $2,000,000 standard deduction; and raise tax rates on larger taxpayers so the package nets about $90 million a year for a set of human‑services and public‑safety priorities. It would include a six‑to‑eight year sunset structure and go to Seattle voters on Nov. 4 if the council sends it to the ballot.

Why it matters: City and nonprofit leaders told the committee the revenue could shore up shelters, housing and emergency food programs that they say face cuts from federal actions, while many business owners warned it will discourage job creation and put fragile small and midsize firms at risk. Council members and the executive said the measure is one part of a broader strategy that will not by itself close a roughly $235–$240 million combined general‑fund and payroll‑expense tax gap identified in the April forecast.

Central facts - The city’s…