Appeals court upholds Seattle payroll tax as constitutional

Seattle’s JumpStart payroll tax has cleared its latest legal hurdle.

Why it matters: The payroll tax, which the city council approved in 2020, raised nearly $250 million in its first year, with much of the money going toward affordable housing programs and COVID-19 relief.

• It’s part of the city council’s long-running effort to tax large companies such as Amazon, as the duty is levied on employers, not their workers.

The latest: On Tuesday, Division I of the Washington State Court of Appeals ruled the JumpStart tax is constitutional, affirming a lower court decision from last year.

What they’re saying: Seattle city council member Teresa Mosqueda praised the court’s decision in a news release Tuesday.

• “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,” said Mosqueda, the lead sponsor of the tax.

The other side: The Seattle Metropolitan Chamber of Commerce, which filed the lawsuit seeking to overturn the tax, criticized the city’s focus on taxes as a means to solve its budget problems.

• “Nearly 60% of voters believe taxes are too high for the level of services the city provides,” chamber president and CEO Rachel Smith said in a written statement.

What’s next: The chamber has yet to decide whether it will appeal Tuesday’s ruling to the state Supreme Court, a spokesperson wrote in an email to Axios.