CITY OF SEATTLE
ORDINANCE __________________
COUNCIL BILL __________________
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AN ORDINANCE repealing the tax on gross income derived from the business of selling or furnishing water for hire to customers; amending Sections 5.48.050 and 5.48.060 of 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, signed by the Governor on May 4, 2021, Engrossed Substitute Senate Bill 5096 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. Section 5.48.050 of the Seattle Municipal Code, last amended by Ordinance 124912, is amended as follows:
5.48.050 Occupations subject to tax-Amount
There are levied upon, and shall be col...
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