New report: JumpStart Promised Growth. Seattle Got an Economic Slowdown.

Five years in, it’s clear: Seattle’s JumpStart Tax has fueled an exodus to the Eastside. Seattle’s record business taxes contribute to job loss, high office vacancy and collapsing commercial property values. Meanwhile, Bellevue thrives.   

Overview  

When passed in 2020, city leaders said Seattle’s record new “JumpStart” business taxes would generate progressive revenue from Seattle’s largest, highest-paying businesses to fund COVID-19 relief (an important need at the time), affordable housing, essential city services, long-term economic recovery and resiliency, while jumpstarting economic prosperity throughout the city.   

But since 2020, what we have seen in downtown Seattle is not a “jump start”, but instead, a slowdown. Since being implemented, downtown Seattle has lost around 30,000 jobs. The office vacancy rate increased to 32% in the downtown core. And more than $10 billion in office value has been lost.  

Meanwhile, in Bellevue, dating back to 2020, the city has seen more jobs come to its core, lower office vacancy, and the stability of office building values. This provides a stark tale of two cities and two tax environments just miles apart.   

Seattle has become a tax outlier in the region, and it’s costing the city jobs and tax revenue, while shifting the property tax burden to residents and small businesses, worsening overall affordability in the city.  

It’s clear Seattle doesn’t need more business taxes.  Seattle needs more businesses located and growing in the city paying taxes.   

To do that, Seattle leaders must embrace a more pro-business and pro-jobs tone and tenor, focus on lowering business costs, speeding up permitting new developments and intentionally committing to a more predictable regulatory and tax environment. This is the recipe for job growth, a strong tax base and a more affordable city.  

A New Report: The Tale of Two Cities  

The Downtown Seattle Association conducted an audit comparing the tax environment and business climates of Seattle and Bellevue. This analysis has produced a new report that clearly illustrates where Seattle is losing ground to its neighbor to the east.  

Key takeaways include:  

• Seattle imposes significantly higher and more complex business taxes than Bellevue, including a B&O tax (up to 0.658% of gross receipts), the payroll “JumpStart” tax and a 5% social housing tax on high compensation, in addition to a higher minimum wage and property taxes. In general, Bellevue offers a more business-friendly cost structure, with fewer business taxes and at a lower rate.  

• Depending on industry, Seattle’s B&O tax on gross receipts greater than $2m (0.342% to 0.658%) is two to four times higher than Bellevue’s B&O tax (0.1596%)      

• In 2026, Seattle’s payroll expense tax (“JumpStart Tax”) at the lowest applicable level for each tier (see chart in linked report below for details) would cost relevant Seattle businesses between $1,450 and $9,390 per job. Additionally, for salaries above $1m, Seattle applies an excess compensation tax of 5%, costing, at minimum, $50k per applicable job. Bellevue does not have comparable taxes on either payroll expenses or excess compensation.   

• Downtown Bellevue’s office sector has been far more resilient than downtown Seattle office properties. Between 2020 and 2025, downtown Bellevue’s office properties saw an increase of 7% in assessed value compared to downtown Seattle’s office properties falling 48% in value.  

• In 2019, Seattle’s CBD had an office vacancy rate of 6.7% and in 2025 that had risen to 32% which has led to significant declines in the taxable value of downtown Seattle office properties.   

• Historically, residential property owners comprise around 65% of King County’s tax base. By 2025, that burden had risen to 83% while non-residential properties’ share declined from 35% to 17%.  

• In 2019, Seattle and Bellevue had almost equal property tax rates. However, by 2026, Seattle’s had risen in part due to an increase in city-specific levies and the General Fund, increasing 48% in Seattle (adding $1.91 in taxes per $1,000), while Bellevue’s property tax rate declined 16% over that same period (declining $0.60 per $1,000).  

Click here to read the full report.