KCPQ livestream not available in schedule service
SEATTLE - Seattle’s tax collections have grown dramatically over the past decade, while an increasing share of that tax burden has shifted onto businesses, according to a September 2026 analysis prepared for the Downtown Seattle Association and Seattle Metropolitan Chamber of Commerce.
The report, prepared by ECONorthwest, found that Seattle taxes grew 172% between 2013 and 2025, compared with 31% population growth and 23% employment growth.
The analysis also found that businesses accounted for about 55% of city taxes in 2016, with that share reaching 68% in 2026, or about $1.65 billion.
The report argues that Seattle has become increasingly dependent on a relatively small number of companies for a significant portion of its tax revenue.
Seattle's tax collections have tripled
By the numbers:
Seattle's total tax collections grew from about $900 million in 2013 to $2.8 billion in 2026, according to the report.
The increase includes growth in the local economy, higher rates on existing taxes and new taxes imposed on new tax bases, including the payroll expense tax and social housing tax.
At the same time, the composition of Seattle's tax collections changed.
The report found that broad-based core taxes — including property, sales, business and occupation, and utility taxes — fell from 83% of collections in 2013 to 52% in 2026.
Between 2013 and 2025, the report found:
- Seattle taxes increased 172%
- Taxes adjusted for inflation increased 81%
- Population increased 31%
- Employment increased 23%
- Inflation increased 50%
The report said taxes grew 5.6x faster than the population, 7.5x faster than employment and 3.4x faster than inflation during that period.
Most tax growth since 2018 fell on businesses
Of the $1.08 billion in tax growth since 2018, the report estimates that 83% falls on business.
Business taxes grew by $892 million during that period, while non-business taxes increased by $189 million.
The report estimates business taxes were 2.18 times their 2018 level in 2026, compared with 1.32 times for non-business taxes.
Business taxes increased from $660 million in 2016 to $1.65 billion in 2026, while non-business taxes increased from $530 million to $790 million, according to the analysis.
The report identifies three major changes behind the shift: the payroll expense tax introduced in 2021, the social housing tax approved in 2025 and the Seattle Shield B&O increase in 2026.
A small number of companies pay the newest taxes
Dig deeper:
The analysis found that Seattle's newest taxes are imposed on a relatively small number of businesses.
Fewer than 500 companies pay the payroll expense tax, and the 10 largest payers account for 73% of that tax. The top 100 payers account for 93%.
About 220 taxpayers reported a social housing tax obligation in 2025. The 10 largest taxpayers account for 66% of that tax, while the top 50 account for 90%.
Together, the payroll expense and social housing taxes generated about $520.9 million in 2025. Additionally, the report estimates the 10 largest payers of each tax accounted for about $355.9 million, or 23.3% of all business taxes.
Because the top-10 lists overlap, the report says fewer than 20 distinct firms are responsible for roughly $356 million in annual city revenue.
The report describes the shift as a "tax base [that] no longer grows with the thing it taxes."
What they're saying:
DSA President Jon Scholes called the tax structure a "bad deal for Seattle" because it is too reliant on the contribution from only a few companies.
"That tax structure is repelling jobs outside of the city and repelling investment, and there are ongoing and long-term consequences for that," Scholes said. "Properties in downtown, because of high vacancies, because of too few jobs, their values are worth significantly less than they were four or five years ago. That means other folks are picking up the tab."
Seattle's job losses compared with King County
Big picture view:
The report also examines Seattle's employment trends.
Seattle lost roughly 18,000 jobs in the single year ending March 2025, according to the analysis. It also says Seattle lost about 24,000 jobs between March 2020 and March 2025, while the rest of King County gained about 21,000 jobs.
The report notes that the employment figures do not yet reflect layoffs announced by Amazon, Microsoft and Meta in 2025 and 2026.
The analysis says the city's narrow tax base is tied to the portion of the economy that has been shrinking.
However, the report does not establish that Seattle's taxes caused the job losses. It presents the tax and employment trends together and argues that the two have increasingly diverged since the payroll expense tax was introduced.
Business taxes per employee have increased
The report estimates Seattle collected about $2,700 in business taxes per employee in 2026, compared with $959 in non-business taxes per resident.
That ratio increased from 1.5x in 2012 to 2.8x in 2026.
The analysis attributes the increase to the payroll expense tax, social housing tax and Seattle Shield B&O increase. It estimates the B&O increase accounts for $91 million of the $118 million increase in business taxes in 2026.
The report cautions that the $959 figure should not be interpreted as the amount of taxes paid by individual Seattle residents.
In its conclusion, the report states that Seattle's tax system was built to benefit from economic growth, but that growth has slowed while the tax burden has continued to increase.
The Source: Information for this story came from original reporting by FOX 13 Seattle reporter Alejandra Guzman, who combed through the report put together by ECONorthwest.
MORE NEWS FROM FOX 13 SEATTLE
WA ferries cancel multiple sailings due to widespread crew shortages
Washington closes Snohomish River to all fishing
Tacoma police investigating shooting that killed 2
Silent heart threat found in adults under 30 with no known cardiovascular disease
Best pumpkin patches near Seattle to visit this fall
Emanuel Wilson scores 2 TDs as Seattle Seahawks beat Chargers 30-23
To get the best local news, weather and sports in Seattle for free, sign up for the daily FOX Seattle Newsletter.
Download the free FOX LOCAL app for mobile in the Apple App Store or Google Play Store for live Seattle news, top stories, weather updates and more local and national news.