Business advocates blame the JumpStart tax for lost jobs and falling property values, while city officials point to broader economic forces.
SEATTLE, WA — Seattle’s tax on high-paid workers at large companies is facing renewed criticism as downtown office vacancies remain near record levels and employers expand elsewhere in the region.
The Downtown Seattle Association said in a June report that the city’s JumpStart payroll tax has made Seattle more expensive and less attractive to major employers. The business group compared Seattle with nearby Bellevue, where large technology companies have added workers and occupied new offices. The group said downtown Seattle has lost about 30,000 jobs since 2020, while the assessed value of downtown office buildings has fallen by 48%.
Mayor Katie Wilson disputed the suggestion that one tax caused downtown’s economic problems. She said the COVID-19 pandemic, remote work, technology-sector changes, higher interest rates and national economic policies have affected commercial districts across the country. Wilson also said JumpStart revenue allowed Seattle to maintain services and avoid deeper budget cuts during a difficult recovery.
Seattle adopted JumpStart in 2020, and the tax took effect in 2021. It applies to employers with large Seattle payrolls and workers earning above an inflation-adjusted compensation threshold. In 2026, qualifying compensation begins at $194,452. Rates range from 0.746% to 2.557%, depending on the employer’s total payroll and the employee’s compensation. Employers pay the tax, and the city prohibits them from withholding it from workers’ pay.
The tax was created to support affordable housing, small businesses, climate programs and development in communities that had received less public investment. Housing remains its largest designated use. The city has also relied on the tax to support general government operations during repeated budget shortfalls. About $201 million, or roughly 47% of anticipated JumpStart revenue, was directed to general operations in the 2026 budget, according to city budget figures cited by GeekWire.
JumpStart is projected to collect about $388 million in 2026, below earlier forecasts. The revenue source is heavily concentrated among major employers: About 70% comes from 10 companies, most of them in the technology industry. That concentration gives Seattle a substantial source of money but also leaves collections exposed to hiring cuts, stock-based compensation changes and decisions about where companies assign employees.
Revenue has already shown signs of volatility. Seattle collected about $360 million from the tax in 2024, approximately $46.8 million less than forecast. That followed stronger-than-expected collections in 2023, when revenue reached about $311 million. City forecasters have said changes in technology employment and compensation can cause large swings from one year to the next.
The Downtown Seattle Association argues that the tax encourages employers to place high-paid positions outside city limits. Its report compared Seattle with Bellevue, about 10 miles to the east. The group said downtown Bellevue’s office properties gained 7% in assessed value between 2020 and 2025, while downtown Seattle’s office values lost more than $10 billion. Bellevue does not impose a payroll tax comparable to JumpStart.
Amazon began building a larger Bellevue presence before JumpStart took effect, however. The company announced major Eastside expansion after Seattle approved and quickly repealed a separate employee tax in 2018. Amazon now describes Seattle and Bellevue as parts of its broader Puget Sound headquarters, with about 15,000 employees based in Bellevue. That timeline makes it difficult to determine how much of the shift resulted directly from JumpStart.
Office data confirm that Seattle’s commercial real estate market remains weak, but they do not establish a single cause. CBRE reported that downtown Seattle’s office vacancy rate reached 34.7% in the fourth quarter of 2025, about five times its level before the pandemic. Downtown lost nearly 258,000 square feet of occupied space during the quarter as companies reduced their footprints, even as several technology businesses signed or expanded leases.
The broader Puget Sound market showed modest improvement in early 2026. Regional office vacancy edged down from 28.6% to 28.3% in the first quarter, according to CBRE, while occupied space increased by 356,000 square feet. The Eastside, which includes Bellevue, continued to outperform Seattle because of demand from large companies and artificial intelligence businesses.
High vacancy is not unique to cities with payroll taxes. Downtown office districts in San Francisco, Portland, Chicago and other major cities have also lost tenants and property value since 2020. Hybrid work reduced demand for space, while technology layoffs, higher borrowing costs and corporate cost-cutting delayed a wider recovery. Those national trends complicate efforts to measure the independent effect of Seattle’s tax.
The Downtown Seattle Association is not calling for JumpStart’s full repeal. It has proposed temporary tax relief or incentives for companies that add jobs and invest in the city. Wilson has said Seattle must improve public safety, address homelessness, lower living costs and help more businesses open and grow. Any changes to JumpStart would require action by city leaders as they prepare Seattle’s next budget.
Author note: Last updated July 12, 2026.