CITY OF SEATTLE
ORDINANCE __________________
COUNCIL BILL __________________
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AN ORDINANCE imposing an excise tax on the sale or exchange of certain capital assets in Seattle; adding a new Chapter 5.66 to the Seattle Municipal Code; and adding a new Section 5.45.050 to the Seattle Municipal Code.
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WHEREAS, the Institute for Taxation and Economic Policy consistently ranks Washington State as one of the most unfair tax systems in the country, where lower-income residents pay a higher percentage of their household earnings for taxation; and
WHEREAS, the non-partisan Municipal Research Services Center defines a regressive tax as a tax burden (as a percent of income) that falls hardest upon low-income households, who have to spend a large portion of their income on retail goods and basic needs; and
WHEREAS, there are currently no tax rate limits prescribed by State law for water utilities operated by Seattle Public Utilities; and
WHEREAS, The City of Seattle most recently adjusted the water utility tax rate to 15.54 percent in 2011, which is in addition to the cost of providing water; and
WHEREAS, it is estimated the City will collect approximately $38 million in regressive water utility taxes in 2024; and
WHEREAS, Chapter 196, Laws of 2021, imposed a state excise tax on capital gains in excess of $250,000, with exemptions for retirement accounts and real estate sales; and
WHEREAS, implementing a local capital gains excise tax that conforms to state law is a more progressive method of taxation to replace revenues from regressive taxes no longer collected by The City of Seattle including, but not limited to, the tax on water within Seattle's geographical boundaries; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:
Section 1. A new Chapter 5.66 is added to the Seattle Municipal Code as follows:
Chapter 5.66 CAPITAL GAINS EXCISE TAX
5.66.010 Administrative provisions
All of the provisions contained in Chapter 5.55 shall have full force a...
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