An annual "head tax" of $275 per employee passed
by the Seattle City Council on Monday will impact large travel companies that
operate in the Emerald City.
The council passed the tax, which takes effect next year, to
address a growing dearth of affordable housing and expanding homelessness. It
applies to companies that gross at least $20 million per year in the city.
Among the travel companies that had come out against the
tax were Holland America Group, Expedia Group and Alaska Airlines.
Holland America Group, a subsidiary of Carnival Corp., said
that it employs more than 1,600 people in Seattle, where it keeps its corporate
headquarters. Holland America Group's cruise lines (Holland America Line,
Princess and Seabourn) will make 83 departures from Seattle this summer,
contributing an estimated $225 million to the economy.
"We agree it is important to make Seattle a safe,
welcoming and attractive place for all of its citizens, our employees, our
guests and for attracting tourism. This is essential for the city's long-term
success and vibrancy," the company said. "Additional taxes on
successful businesses who already pay many fees and taxes is not a substitute
for efficient and focused attention from existing city government sources,
Both Expedia Group and Alaska declined to comment on the
head tax Tuesday, but Expedia CEO Mark Okerstrom and Alaska CEO Brad Tilden
signed a letter opposing an earlier version of the head tax ordinance, which
would have cost large companies in Seattle $500 per employee.
The letter, posted on the website Medium,
was signed by more than 100 business executives. It states that signees "oppose
this tax and recommend an alternate approach."
The tax would only affect 3% of Seattle's largest
businesses, "making businesses pay a price for creating jobs. This is like
telling a classroom that the students who do the most homework will be singled
out for detention."
Instead, the letter suggested the council scrap the idea of
the tax for several alternatives. "A proper approach would combine
evaluating the need for additional expenditures beyond the city's 17.4%
increase the past three years, tax revenue increases based on an optimal mix of
taxes, a prioritized spending plan to address both housing and infrastructure,
as well as new zoning and related policies to reduce the costs of housing and
Expedia plans to move from its headquarters in the suburb of
Bellevue to Seattle in 2020. Alaska, meanwhile, houses its corporate headquarters in the municipality of
SeaTac, home to Seattle's airport. The airport, however, is run by the Port of
Neither the port nor representatives of the Seattle City
Council responded to emails Tuesday seeking clarification about whether
airlines operating out of SeaTac are subject to the tax.