Council committee OK's B&O tax change that benefits Russell Investments
A tax change requested by Russell Investments was approved by a Seattle City Council committee Thursday.
Seattle Times business reporter
A change in the city's business and occupation tax requested by Russell Investments was approved by the Seattle City Council's Finance & Budget Committee Thursday.
If the change is approved by the full council Monday, as expected, a new tax classification for "international investment-management services" businesses would be created.
Russell and any other firms in that category would pay a B&O tax of 0.15 percent of gross receipts.
Without the change, Russell, which announced last week its 900-employee headquarters will move from Tacoma to Seattle, would have been in a category with a 0.415 percent tax rate.
But city Finance Director Dwight Dively said he doesn't know if the change will translate into a tax break for Russell, because the base on which the tax is calculated is complex and is different for the two classifications.
Russell sought the change for consistency with the state B&O tax classification, he said.
Seattle officials have estimated Russell will pay $250,000 a year in city B&O taxes with the change.
To keep Russell, Tacoma had proposed an assortment of incentives, including phaseout of its B&O tax on Russell and similar companies by 2013.
Dively said he did not know how many other firms already in Seattle would be included in the new classification. But Mike Gowrylow, spokesman for the state Department of Revenue, said last week that at least nine in the city already claim the state's lower rate for international-investment businesses.
They presumably would be eligible for the city's lower rate as well, since the city legislation mirrors the state's.
The new B&O tax classification is the only change the city is making to accommodate Russell, Dively said: "To my knowledge, the city has done nothing else."
Meanwhile, Gov. Chris Gregoire says Tacoma will receive $700,000 in economic-development money that had been intended to keep Russell Investments in the city, The News Tribune reported.
She told the Tacoma City Club on Wednesday she had taken the money from strategic reserves more than a year ago for Tacoma parking and streetscape improvements.
Seattle Times staff reporter Jim Brunner contributed to this report.
Eric Pryne: 206-464-2231 or firstname.lastname@example.org
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