News & Resources


Court Rules Seattle Payroll Expense Tax Is Constitutional

BY: Lia Coniglio, Esq | 07/22/22

The Washington Court of Appeals ruled that the Seattle payroll expense tax is an excise tax on businesses and not a tax on employee income and is therefore constitutional [Greater Seattle Chamber of Commerce v. City of Seattle, Dkt. No. 82830-4-I (Wash. Ct. App., 6-21-22)]. The Court of Appeals affirmed the lower court’s decision granting summary judgment to the city (meaning the lower court ruled in favor of Seattle without holding a full, formal trial).

The Seattle payroll expense tax remains in effect. An employer cannot make any deductions from employee compensation to pay for this tax. Employers are responsible for the tax on the payroll expense of the business. The rate will vary based on the employer’s total Seattle payroll expenses, including compensation paid to Seattle employees.


More information about the Seattle payroll expense tax can be found on the Seattle Department of Finance and Administrative Services website. Forms, FAQs, webinars, online filing, contact information, and the statute and rules are all available.

APA’s Guide to Local Payroll Taxes (online or print) contains information about the tax (see Section 16: Washington) and the Local Income Tax Compliance course begins in September (offered in an interactive virtual classroom, webinar, and webinar on demand).

Interested in more state and local payroll coverage? APA’s PayState Update eNewsletter is perfect for you.

Lia Coniglio, Esq., is Managing Editor of PayState Update and Senior Manager of State Payroll Information Resources for the APA.