In July, the Seattle City Council passed a payroll tax on employers with payrolls over $7 million. Seattle’s Department of Finance and Administrative Services (FAS) is responsible for crafting the rules to implement the legislation, which takes effect on January 1, 2021. Today, FAS released draft rules for public comment.
The Seattle Metro Chamber will be submitting comments with concerns and questions on behalf of the business community. If you would like to talk to staff about your concerns and questions, please contact Mackenzie Chase. We also encourage you to submit your own comments—either at the public hearing or in advance by writing—particularly if there are concerns that are unique to your business or industry. Your voice is incredibly important and necessary in this discussion!
Who Should Take a Closer Look?
We urge you to review these rules if your business is located in Seattle or if you employ people who work or live in Seattle, and your payroll is over $7 million. This tax might apply to you if any of those employees earn $150,000 or more in compensation each year. You can see more about what classifies as compensation, and what does not, in the draft rules.
Important note: under the examples contained in the draft rules, if an employee works from home (permanently or as a result of COVID-19) more than 50% of the time, and the employee lives in Seattle, the employer is responsible for paying the payroll tax on that individual’s salary.
FAS is holding a public hearing via Webex on December 2 from 10:00 a.m. to noon. Here is the announcement. You can join the public hearing by clicking this link or by calling 408-418-9388, Conference ID: 146 131 4745.
Before the hearing on December 2, you can submit written comment to:
Attn: Brian Collins, Tax Policy Analyst
License and Tax Administration
700 Fifth Ave. – Suite 4250
P.O. Box 34214
Seattle, WA 98124-4214
Before December 2, you can also email comments to firstname.lastname@example.org. Make sure to reference “Draft Rule 5-980 Payroll Expense Tax Comments” in your email subject or the first line of your email.