Summary:
Seattle voters will decide on the Seattle Shield Initiative this November, which aims to cut taxes for most small businesses while raising revenue from the city's largest corporations to protect critical local services threatened by federal budget cuts. The initiative would raise the Business and Occupation (B&O) tax exemption threshold and create a new deduction, eliminating tax liability for roughly 76% of current B&O taxpayers and reducing taxes for about 90% overall. The plan would restructure B&O tax rates for the city's largest businesses, generating approximately $80 million annually, of which $60 million would backfill programs endangered by federal funding cuts and $20 million would stabilize ongoing city services.
Seattle voters will decide this November whether to approve the Seattle Shield Initiative, a measure designed to cut taxes for most small businesses while raising revenue from the city’s largest corporations to protect critical local services threatened by sweeping federal budget cuts under the Trump administration.
On Monday, Aug. 4, Mayor Bruce Harrell, joined by Councilmember Alexis Mercedes Rinck, signed the legislation following unanimous City Council approval, officially placing the proposal on the ballot.
“This is a significant win for Seattle’s small businesses and our broader community,” Harrell said. “By reducing taxes for 90% of businesses, we are helping local entrepreneurs thrive and compete while ensuring they can continue to contribute to the fabric of our neighborhoods. At the same time, this legislation secures critical local funding, safeguarding essential human services and programs that our residents rely on, especially during a time of uncertainty surrounding federal funding.”
Under the initiative, the city would raise the Business and Occupation (B&O) tax exemption threshold from $100,000 to $2 million in gross revenue and create a new $2 million deduction. This would eliminate tax liability for roughly 76% of current B&O taxpayers—primarily small and medium-sized businesses—and reduce taxes for about 90% overall.
To offset the loss in revenue, the plan would restructure B&O tax rates for the city’s largest businesses, generating approximately $80 million annually. Of that, $60 million would backfill programs endangered by federal funding cuts, while $20 million would stabilize ongoing city services.
Programs that stand to benefit include emergency housing vouchers, food access initiatives, gender-based violence services, and affordable housing investments. The proposal is intended to shield residents from what city officials describe as “the cruelty and chaos created by the Trump Administration and Congressional Republicans,” Rinck said.
“Now, voters have the choice this November to give small businesses relief and help them stay open,” Rinck said. “These are the coffee shops where they get your oat milk latte just right, the family restaurants where they know you want 3 stars on your pad thai, and the bookstore that has staff recommendations on what you should read next. In turn, this measure will ensure the largest corporations contribute more to safeguard our city and residents.”
The Seattle Shield Initiative comes as the city faces a $143 million budget shortfall and heightened fiscal uncertainty due to federal cuts. If passed, it would be one of the city’s most significant tax reforms in years, combining small business relief with targeted revenue from larger corporations to preserve social and human services. The proposal will appear on the November 2025 general election ballot. Meanwhile, the City Council will begin budget deliberations in late September after Mayor Harrell submits his 2026 budget adjustments.