Seattle Nixes Square-Footage Tax

Seattle mayor Ed Murray signed Seattle City Ordinance Number 124910 on December 1, 2015, ending the Seattle square-footage business tax. This change is effective January 1, 2016, which means the last Seattle square-footage business tax is due January 31, 2016, for the period ending December 31, 2015.

The Seattle City Council unanimously agreed that “economic conditions have changed since 2008” and “the city desires to simplify its tax code.” In addition to simplifying the city’s tax code, the ordinance is also good for business.

Businesses that lease, own, or occupy space within Seattle will no longer incur a tax of 15 cents to 44 cents per square foot per quarter. A company with a 26,000 square-foot office floor, for example, could expect to save as much as $10,000 per quarter (omitting possible credits given against the square-footage tax) and avoid overpayment, a common error among companies.


Seattle enacted the square-footage tax to replace expected losses from a business-and-occupation tax reform bill passed by the state legislature. The bill required the apportionment of service and other income under a two-factor apportionment formula made up of a payroll factor and a sales factor.

All businesses located in Seattle that were subject to the business license tax were also subject to the square footage tax, unless specifically exempted from the tax. Seattle businesses that didn’t ship goods or provide services outside of Seattle were entitled to a 100 percent credit of the square footage tax. The intent was to tax businesses only if they received a reduction in Seattle business license taxes for business done outside Seattle.

We're Here to Help

Seattle businesses apportioning revenue outside Seattle will want to revisit their apportionment calculations. For more information about the Seattle business license tax, or for help determining the implications of the termination of the Seattle square-footage tax, contact your Moss Adams professional or email

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