Businesses Now Pay Two-thirds of Seattle’s Taxes As the City Loses Jobs

Seattle’s tax collections have grown far faster than its population, employment and inflation over the past decade. Businesses are now carrying a much larger share of the load, according to a new analysis commissioned by the Downtown Seattle Association and the Seattle Metro Chamber.

The report, A Growing Burden, A Shrinking Base, released in early October, was prepared by independent consulting firm ECOnorthwest. It found that between 2013 and 2025, Seattle taxes rose 172%. Over the same period, population grew 31%, employment grew 23% and inflation rose 50%.

Businesses carry more of the burden

The analysis estimates that businesses will account for 68% of city taxes in 2026, about $1.65 billion, up from roughly 55% in 2016. It traces the shift to the payroll expense tax, which took effect in 2021, followed by the voter-approved social housing tax in 2025 and the Seattle Shield business and occupation tax increase in 2026.

Other key findings:

• A shrinking core: Property, sales, B&O and utility taxes made up about 83% of city tax revenue in 2013. That share is projected to fall to 52% in 2026.
• A narrow base: Fewer than 500 companies pay the payroll expense tax, and about 220 pay the social housing tax. The 10 largest payers of those two taxes account for roughly 23% of all business taxes the city collected in 2025.
• Per-worker burden: Inflation-adjusted city tax collections came to about $2,300 per Seattle employee in 2025, compared with $940 per resident. The report notes these are not taxes paid directly by individual workers or residents.

“What stands out is the widening gap between tax growth and growth in jobs and population, along with an increasing reliance on businesses for city revenue,” DSA President & CEO Jon Scholes said. “At a time when Seattle is working to grow jobs and attract investment, understanding those dynamics is essential to our economic future.”

Seattle Metro Chamber President & CEO Joe Nguyen said the trajectory “is not sustainable. The question cannot always be how to collect more money. It must be how to deliver better results with the money we already have.”

A changing job market

The analysis comes as Seattle’s employment picture weakens. A DSA report released last month, Seattle’s Shifting Employment Landscape, found the city lost more than 18,000 jobs between 2024 and 2025. About 13,000 of those, or 70%, were downtown. Over the same period, Bellevue added 5,375 jobs and Tacoma added 662. Downtown’s workforce in 2025 was an estimated 22% below 2019 levels, compared with 6% below in Bellevue.

Downtown still hosts more than 300,000 jobs and has seen gains in visitation, residential population and public safety. But Scholes called the job numbers “a clear warning that we cannot take that position for granted.”

What businesses are saying

A 2026 Business Climate Survey released Oct. 26 by DSA and the Chamber points the same way. The 247 businesses and organizations that responded gave Seattle’s business climate an average score of 39 out of 100. They scored the city’s responsiveness to business needs 26 out of 100. Public safety and taxes and fees were tied as the most frequently cited challenges, at 64% each. Among businesses that had considered moving operations, jobs or investment out of Seattle, 59% cited taxes or fees.

“Businesses want to invest here, but we have to create the conditions that give them confidence to do so,” Scholes said.

What’s next

The City Council is now reviewing Mayor Katie Wilson’s proposed 2027-2028 budget, which balances without raising the JumpStart Payroll Expense Tax. DSA supports the proposal. Scholes has called it “a helpful signal to employers weighing where to grow” and “a strong foundation” to build on in the coming weeks.

“It will take the public and private sectors working together to reduce barriers to investment, support employers and entrepreneurs and ensure downtown remains the economic engine of Seattle and our region,” he said.