As independent grocers in Seattle, we’ve weathered many storms: a global pandemic, supply chain disruptions and the lingering effects of inflation. Our small businesses are more than stores; they are community hubs where neighbors connect, and families rely on us for fresh, affordable food.
But Seattle’s proposed Business and Occupation tax increase threatens to push our businesses to the brink, forcing us to raise grocery prices at a time when Seattle families can least afford it. The Seattle City Council is expected to vote to place the proposal on the November ballot for voter approval.
We understand that our community is already feeling the strain of rising costs. We urge city leaders to reconsider this misguided policy. While we appreciate the city’s efforts to address budget challenges, this proposal, introduced by Mayor Bruce Harrell and Councilmember Alexis Mercedes Rinck, is the wrong approach. The politicians will say that they protected small businesses by raising the B&O tax threshold from $100,000 to $2 million in gross revenue. That might sound like relief, but it won’t help high volume, low-margin businesses like your neighborhood grocery. For grocers like us, operating on razor-thin margins, the increased tax burden on our suppliers will inevitably trickle down to our shelves and our customers’ wallets.
Adding a tax hike that impacts our suppliers only compounds the challenges we already face. Agricultural shippers and processors, critical to our supply chain, will face higher costs under the new tax structure. These costs won’t be absorbed by big corporations. They will be passed to us, the grocers and ultimately to consumers.
Our stores operate on margins as low as 1%-2%. Unlike large chains, we don’t have the financial cushion to absorb these cost increases. If our suppliers raise prices to offset the B&O tax hike, we’ll have no choice but to pass those costs on to customers. Families already struggling with grocery bills, up 20% nationally since 2020, will feel these increases acutely. A recent Washington State Food Security Survey, conducted by the University of Washington and Washington State University, found that food insecurity rates were significantly higher among households with respondents identifying as Black (77%) or Hispanic (70%), indicating that this tax would disproportionately impact minority communities.
The city argues the tax hike will generate $90 million annually to address a $251 million budget deficit and fund human services. We support investing in our community, but targeting businesses in a way that raises food prices for Seattle families is shortsighted. Seattle’s economic challenge such as high office vacancies, declining tourism and reduced consumer spending demand solutions that don’t burden essential services like grocery stores.
Our stores are where neighbors meet and children grow up. Raising B&O taxes now, amid economic uncertainty, is not the right approach.
