A legal challenge against Seattle’s tax on its largest employers by the Seattle Metropolitan Chamber of Commerce, the city’s leading business group, has been defeated. Tuesday, the Washington Court of Appeals upheld the dismissal of the lawsuit brought in December 2020 that tried to challenged the constitutionality of the tax.

Earlier this year, the city announced the JumpStart Tax was producing stronger than expected revenue for its spending plan of housing, small business, and environmental initiatives.

“JumpStart has been – and thanks to today’s victory – will continue to be, one of Seattle’s biggest tools to address our city’s most urgent problems,” Councilmember Teresa Mosqueda, one of Seattle’s two citywide representatives and credited as the architect of the tax, hailed this week’s decision, said in a statement.

The stronger than expected totals have been an important boost for City Hall’s coffers. CHS reported here on 2022 budget planning that hinged on the new tax even as forecasts predicted lower than expected revenue due to increased work at home rates.

The payoff on 2021’s launch of the new tax wasn’t dented by the pandemic. The tax rate ranges from 0.7% to 2.4% with tiers for various payroll and salary amounts. It is now generating more than $200 million a year for for a city facing massive COVID-19 crisis-ripped holes in its budget forecasts and in desperate need of revenue for hoped expansion of housing, business assistance, and community spending. Late amendments approved include an expanded 20-year sunset clause that puts the tax in place for two decades. Grocery businesses and independent contractors are exempt.

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