Amazon flexes muscles, Seattle backs down on business tax

SEATTLE (AP) – Amazon balked and Seattle is backing down.

City leaders said they plan to repeal a tax on large companies such as Amazon and Starbucks as they face mounting pressure from businesses, an about-face just a month after unanimously approving the measure to help pay for efforts to combat a growing homelessness crisis.

The quick surrender showed the power of Amazon to help rally opposition and aggressively push back on taxes at all levels of government, even in its affluent home city where the income gap is ever widening and lower-income workers are being priced out of housing.

It has resulted in one of the highest homelessness rates in the US.

Amazon and other businesses had sharply criticised the tax, and the online retailer even temporarily halted construction planning on a new high-rise building near its Seattle headquarters in protest.

Members of the public look on at a Seattle City Council before the council voted to approve a tax on large businesses such as Amazon and Starbucks to fight homelessness in Seattle. – AP

Mayor Jenny Durkan and seven of nine City Council members said late Monday they worked with a range of groups to pass a measure last month that would strike a balance between protecting jobs and supporting affordable housing.

But a coalition of businesses is working to get a referendum on the November ballot to overturn the tax.

In a statement Durkan and the council members said, “It is clear that the ordinance will lead to a prolonged, expensive political fight over the next five months that will do nothing to tackle our urgent housing and homelessness crisis.” They said they would move forward to repeal the so-called head tax.