Just days after the Seattle City Council approved the levy, the No Tax On Jobs campaign, a coalition of businesses, announced it would gather signatures to put a referendum on the November ballot to repeal it.
Amazon, Starbucks, Vulcan, Kroger and Albertsons each promised $25,000 to the effort last week, according to a report filed by the campaign. The Washington Food Industry Association pledged $30,000.
Referendum backers will have to gather 17,632 signatures of registered Seattle voters by June 14 to get the measure on the ballot.
The so-called head tax will charge businesses making at least $20 million in gross revenues about $275 per full-time worker each year. The tax would begin in 2019 and raise about $48 million a year to build affordable housing and provide emergency homeless services.
Opponents say the Seattle measure is a tax on jobs and questioned whether city officials are spending current resources effectively.
Worker and church groups and others praised the tax as a step toward building badly needed affordable housing in an affluent city where the income gap continues to widen and lower-income workers are being priced out.
The clash over who should pay to solve the city housing crisis that's exacerbated by Seattle's rapid economic growth featured weeks of tense exchanges, raucous meetings and a threat by Amazon, the city's largest employer, to stop construction planning on a 17-story building near its hometown headquarters.
Amazon has resumed planning the downtown building, but the company remains "apprehensive about the future created by the council's hostile approach and rhetoric toward larger businesses, which forces us to question our growth here," said Drew Herdener, Amazon's vice president for global corporate and operations communications.
Four councilmembers initially pitched an annual tax of $500 per full-time employee before a compromise proposal lowered the tax rate after they could not muster six votes needed to override a potential veto by Mayor Jenny Durkan.
The mayor signed the head tax on May 16, saying "we must make urgent progress on our affordability and homelessness crisis."
Seattle's action came as cities around San Francisco consider business taxes to help offset issues created by the growth of tech companies.
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