Potential costs, complications of Seattle income tax

VIDEO: How to implement an income tax

We wanted to know about the challenges of implementing a Seattle income tax.

So we asked Seattle University Taxation Professor Susan Weihrich to take a look at the draft ordinance with us, and she spotted something.

“There's our credit for income taxed in other jurisdictions,” she said.

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And that attempt at fairness, can make things complicated.

“Did you have to file a California tax return for any of your income? Please attach that tax return so we can see what that income is. You just increased the compliance cost both for the individual and for the city because they are the ones who will have to check it,” she explained.

Weihrich noted there only seven states that don't have an income tax, and our search found none them have cities that levy their own income taxes like Seattle would.

“You're going to have to people who audit tax returns, cause there's not already that structure in place because we didn't we don't have a state income tax.

Washington DC collects an income tax on its own. And the tax agency's budget is $30 million.

“The major challenge for the city is getting the infrastructure in place so they can collect the tax fairly.”