On Monday, Seattle City Council voted to approve the “JumpStart Seattle” payroll tax bill. The bill is expected to go into effect January 1, 2021, and raise an estimated $200 million. Initially, the revenue will be used for coronavirus relief efforts, but long term will address homelessness in Seattle.

Companies with more than $7 million in annual payroll will be charged a percentage on all employees with salaries of at least $150,000. For businesses with a payroll expense of up to $100 million, the tax rate is as follow:

–         0.7% of the payroll expense of employees with annual compensation of $150,000 to $399,999.99

–         1.7% of the payroll expense of employees with annual compensation of $400,000 or more

The original legislation did include an exemption for not for profit organizations, but the council did vote to exclude that exemption. The exemption was replaced with a very narrow exemption for  “Non-profit healthcare entity” which means (a) a non-profit entity engaged primarily in the provision of comprehensive healthcare services, including primary and specialty care, and other non-profit healthcare entities that provide at least 50 percent of their services to patients covered by Apple Health and TRICARE, and to patients who have no third-party payor; (b) a non-profit entity that conducts life sciences research and development; or (c) a predominately capitated provider group within an integrated delivery system operated by a fully non-profit carrier licensed under chapter 48.44 or 48.46 RCW.

LeadingAge will continue to engage with the city council, urging them to amend the exemption to cover a larger group of healthcare providers.

The payroll tax is set to sunset on December 31, 2040. Seattle City Council is expected to release a more detailed spending plan shortly, and we will continue to keep you updated as information is released. 

Questions?

Contact: 

Alyssa Odegaard- Vice President, Public Policy 

p: 253.964.8870