By Alia Sinclair

Beginning in 2027, the City of SeaTac is facing a projected deficit of approximately $7 million per annum. To meet Council’s policy-level direction to close the structural deficit and work toward a $10 million year-over-year budget improvement target, a B&O tax has been identified as a necessary tool.

The proposed tax will be implemented at a rate of 0.2% for businesses with a profit threshold of $200,000 or more. 

During the calendar year of 2026, city staff will undertake several key steps to refine and tailor the ordinance. 

These steps include:

  • Engaging a third-party consultant to conduct a comprehensive rate and economic-impact study.
  • Facilitating structured outreach with the business community.
  • Adjusting exemptions or adding mitigation measures depending on the results of the impact study. 

The B&O Tax is expected to generate between $2 million and $5 million annually, depending on the final rate structure and industry sectors included. 

This revenue is eligible for general fund spending and is considered critical to addressing the City’s projected structural deficit, replenishing reserves, and supporting Council’s ability to advance major priorities, including the planned Civic Campus, public safety funding, and implementation of equitable development strategies that support homeownership opportunities for current city residents.

Without the B&O tax, the council would be forced to make cuts to crucial city services.

Councilmember James Lovell voiced his support of the ordinance stating:

“…a 0.2% tax on businesses making over a certain amount is a really powerful way for us to work on a structural deficit in a city that needs to be here in order for [SeaTac businesses] to thrive. Again, we have work to do, we have time to do it. And I am proud of the decision I hope we make.”

The B&O Tax Ordinance is expected to take effect on Jan. 1, 2027.