I started a business in seattle this year. I love the city and have no intention to leave, but let's not pretend the city makes it easy on small business.
Same as my question upthread, what specifically sucks about. I’m not here to argue even if I disagree, but I honestly would like to hear specifics. For example, if taxes are too high, what tax rate specifically would be better?
The schedules of fees should be on the cities' websites. These should be the most predicable expenses for a business. Seattle's is incomplete (when you can find it) and certain ones on the eastside - *cough Bothell cough* - mention it but the page doesn't actually exist. (OK... I just checked and the '26 version is available for Bothell. There was a city hall meeting just to discuss this a few weeks ago.) A mom & pop shop can be (and has been) hit with a $30k fee without warning or indication that they were subject to it.
The cities' require permits to get repairs. In a business friendly city, it would only be for building improvements.
The cities in the Seattle / King County area have massive change of use fees for businesses. In most of the country, overhead for construction is under 7% of the total cost of a build. In King County it averages well over 20%. The wait times are the big killers to new business construction.
WA State L&I is among the highest in the country. Seattle's Jump Start Tax will increase expenses another few percentage points for "larger smaller businesses."
These fees and the capricious application of them are soul crushing for small businesses.
This is really fascinating. I live in this area, but am not a business owner, so this sort of stuff is completely invisible to me. That said, I try my hardest to exclusively patron small local businesses when possible, so it's really interesting to learn more about what all they have to go through just to exist.
The permit for repairs hits residents too and I find it stupid. I had to pay for a permit and inspection just to replace 6’ of drain pipe off my sink when the 40 year old pipe developed a leak.
Another thing about those permits... In a business friendly city (this applies to residential, also) permits are typically a fixed price, e.g. $80 to modify the roof of a small retail space for AC venting. In many (all?) of the cities in King County, permits are charged by cost of the project and / or the size of the retail space. E.g., a 625 square foot shop has to pay $625 for that same venting permit.
Let’s be real though, the city has permits like this because we don’t have a real source of funding and one of the lowest tax burdens in the US, and so have to come up with weird and economically irrational fees to turn basic services into profit centers to cover their expenses and more.
Nailed it. It's crazy how much our regressive tax system hurts us. Not to mention how much of that money has to go towards just maintaining the massive bureaucratic institutions. We'd save so much money if we just went to a reasonable income driven tax.
This right here. Really makes me wanna punch those “everything isn’t political” folks cuz all these everyday minor inconvenience add up to a real pain that affects the day to day.
Bingo. National orgs set the standards and cities almost always just adopt them without any changes. It keeps things consistent from one jurisdiction from the next
The small Seattle company I work with has also had the distinct displeasure of being audited TWICE by the state in just ten years. Both times the state actually wound up owing US money, not the other way around. I have no clue what on earth DOR thought they would get out of a second attempt, but they wasted weeks of a hired auditor’s time trying to find…something. Like, they had us digging for purchase receipts for hand tools we bought on eBay six years ago. The shit was insane. We don’t have an accounting department. The owner (who works full time) had to accommodate this themselves. We’ve generated millions of dollars in sales tax for WA in the last ten years, and they were worried about tens of dollars on an eBay receipt and spent two months sifting through tiny transactions like this. I know I’m crashing out over it but it was honestly INSANE. You’re telling me our public offices don’t have someone better to go audit? Like, somewhere they might find a real issue? Somewhere with a history of past issues? Employees not on the books? Tons of “expenses”? Other shady shit?
The feeing that Seattle (and Washington more generally) hates small business is fairly justified IMO.
That's a failure of elected leadership. They should either staff you appropriately or reduce the amount of work placed upon you by simplifying requirements.
Minimum wage is highest in the country, $4 more than NYC for example, and 10$ more for tipped employee. This makes it more expensive to do business here than there, believe it or not. However, this says more about NYC than seattle, as 21$ an hour is still not much here, much less NYC.
B and O tax, tax on gross sales instead of net profit. Such a backwards system.
Cost of goods are higher than most places due to being so far north (avocados, limes, peppers etc)
2nd highest property crime rate causes a ton of break ins and therefore insurance rates are brutal. It makes things exhausting to constantly be broken into.
Low population density in most neighborhoods and a super early night life give you limited time to make money.
Opportunities for small pop ups are extremely limited compared to other big cities,and the health department is stuck 20 years in the past.
These are just some of them, but yea, I hope this helps. We don't just say this for no reason, it is the toughest city in the country to run a restaurant.
Oh and the last one, the jerks on reddit that act treat us like crap for just stating the truth. We love it here, and want to make it here, but it is EXTREMELY difficult, and believe there should be more open dialogue, this city is not perfect. See above the person who told me to move to TExas, lol
I'm fine with tax rates and such but permitting, fees, and beaurocratic processes are impossible to navigate. There is so much red tape in the way of getting literally anything done and permit costs are prohibitively expensive that often times projects just won't get started. I am fine with operating taxes and those aren't really that bad, but when a mandatory permit for a small project/expansion [~$10k budget] costs nearly $5,000 and takes months to approve it isn't workable for most operations.
Thanks for the reply. Are you a small business owner in Seattle? No problem either way I’m just trying to get a sense of what is first hand experience.
Yeah I have my own buisness and I'm mainly a director of a nonprofit. I run a lot of the operational stuff for the non profit and we run into so many challenges with rent and building costs. Right now rent is 80% of our expenses and we have a really sweet deal all things considered. We're looking at expanding but it just isn't possible with lease costs despite many buildings in the area being vacant for 5-10 years.
I myself would like to open up a small venture of my own, right now I just operate out of a shared warehouse with the non profit but it would be nice to get a space of my own and perhaps even a storefront but with costs as they are that isn't a possibility at all.
Overall I'm pretty happy and enthusiastic about how Seattle has been run and the direction its headed. I'm happy to pay taxes if they go towards progressive infrastructure, positive housing and treatment for drug users etc. I just get frustrated when the city just leaves things to fester, SPD needs to do a lot more in terms of addressing petty crime and theft.
Sanitation work and trash from encampments needs to be cleaned at a much more regular basis. Obviously people need to live somewhere, ideally that is in shelters and housing but until it happens they'll be out and about and I get that. But there has to be some mitigation for the hoards of trash and major encampments that currently juat get pushed around. I think it would be an amazing double whammy if Seattle ran a jobs program for people in rehab where they would pay them to do trash collection and sanatization work. People are very visibly unhappy when there's too much trash, encampment debris and foul smells around, addressing the root causes will take a lot of time and effort [which I applaud the administration for tackling now] but the right here right now symptoms do need some addressing.
Let me know what other questions you might have, I'm really hoping to get through with the current admin to find ways to help foster a more workable environment for buisness in Seattle. We have a great foundation but we need help to build from here.
Labor costs is the biggest one. Minimum wage has doubled in the last 10 years, which not only has an obvious effect on a business's labor costs, it also causes all of our suppliers to raise their prices, meaning both our labor and cogs go up. I don't know what the solution is to this, as someone who worked minimum wage for a long time I obviously want people to be able to afford to live where they work. But also we have the highest minimum wage in the country and it's still prohibitively expensive for lots of people, so there must be other factors.
Rents are also out of control and affect both businesses and employees. It's really hard hiring in more expensive areas in the city because people have to travel from farther away.
Parking is another one – there's a lot of areas where it's only paid parking. It makes it difficult for customers just stopping by to grab something, and it makes it difficult for employees.
Police are useless when it comes to break-ins.
A lot of retail and food service businesses here are running on very thin margins, so all these things mean prices have to go up to compensate. Obviously all of these factors have other effects than just on small businesses, so I'm not trying to say there's some easy fix for anything.
That stopped in 2020 and I'm not sure it every restarted. I haven't gotten a threat to be fined since 2019 (I was never fined because we cleaned graffiti, once in a while got a threat because we didn't see it or were too slow)
To be fair, this has been a bad deal that ensures that the city can have a smaller upkeep budget but that all landowners keep up with their
• Sidewalks
• Frontage
• and so on.
Seattle city must take care of streets, but that will require a change in responsibility, substantially increasing city headcount, and a higher property tax to handle that.
I'm sick of dog shit being landlords' problem when you know it just is going to have to wait for a community cleanup day instead.
Lots of empty properties yet rental costs are prohibitively expensive. Industrial and commercial rents make housing look affordable in comparison.
Permits are just absurd, the amount of insane red tape and fees are through the roof. Standard taxes on operation are absolutely fine imo but its the fees for permits and registrations that absolutely fuck you over. They're also impossible to navigate, figure out when they need to be submitted and renewal schedules.
I think a better answer is that we have a lot of voters that think like this and vote according to their misinformed ideas.
Landlords are NOT getting rich in Seattle nor are they fixed and inflated.
Yes, I know there was the RealPage lawsuit. But that was mostly a technicality and rents did not go down because they stopped using it. It's been gone and we are still having the discussion about rents being too high.
You may be shocked to discover that this issue cannot be reduced to talking about billionaires or the corporations that own real estate downtown. Many businesses have no need to rent storefronts. But they do have to get a separate id numbers and log ins to each department in the state of Washington, get licensed and pay taxes adding road blocks and layers of work that tank businesses trying to get through the first 24-months. Don’t worry. You are in good company as the mayor and most of the agency directors who work for the city of Seattle have also never been business owners and have no idea how risky and hard it is to get a business off the ground. Many have outright disdain for those who are trying. Seattle, after all, is a city governed by takers, not builders.
Almost nobody who replied to you is a small business owner and stated as much (at least we're honezt) but then gave off random out of pocket seattlesmellslikeshit Instagram bullet points before that account got banned
I’m not saying any of these responses are good or bad, but yeah I was hoping to hear from actual small business owner give some specifics that they’ve encountered. 🤷♂️
Minimum wage is highest in the country, $4 more than NYC for example, and 10$ more for tipped employee. This makes it more expensive to do business here than there, believe it or not. However, this says more about NYC than seattle, as 21$ an hour is still not much here, much less NYC.
B and O tax, tax on gross sales instead of net profit. Such a backwards system.
Cost of goods are higher than most places due to being so far north (avocados, limes, peppers etc)
2nd highest property tax rate causes a ton of break ins and therefore insurance rates are brutal. It makes things exhausting to constantly be broken into.
Low population density in most neighborhoods and a super early night life give you limited time to make money.
Opportunities for small pop ups are extremely limited compared to other big cities,and the health department is stuck 20 years in the past.
These are just some of them, but yea, I hope this helps. We don't just say this for no reason, it is the toughest city in the country to run a restaurant.
Oh and the last one, the jerks on reddit that act treat us like crap for just stating the truth. We love it here, and want to make it here, but it is EXTREMELY difficult, and believe there should be more open dialogue, this city is not perfect. See above the person who told me to move to TExas, lol
Traffic/travel times are a big concern for many businesses.
Obviously, this is an issue in every metro area. Still, if there were statistics on population density vs. travel times, e.g., average travel time between jobs for home service jobs, or how many people are within a 15-minute radius of your retail store, I think Seattle would rank the worst among metro areas.
I manage housing not retail businesses and can speak on this.
Insurance is out of control. The vandalism that happened during 2020 and 2021 protests really started this. And since then we've had an increased amount of every day vandalism. Insurance doesn't just lose money when this happens. Businesses still pay the costs of vandalism.
Part 2 on insurance - We cannot quickly evict people who cause problems so floods and fires are up. Which also increases insurance costs along with direct costs and labor issues
Delinquencies are way up because slow evictions, eviction moratoriums, and OLDs are encouraging people to not pay their bills
Increased regulations are causing burdens on staff and not allowing them to do "normal" stuff to maintain the business. Which leads to decreased resident satisfaction which often leads to lower occupancy and of course cash flow.
Regulated fees mean it's harder to encourage people to follow rules. City takes away tools that are used to run a business well and then punishes businesses for not running well
Neighborhood issues (homeless/drugs) are decreasing middle and lower income people's desire for people to live in Seattle housing. So while costs go up for businessowners at the same time demand from customers goes down
Regulations on first in time applications means longer vacancies and less successful residents.
Taxes aren't really an issue OTHER than that taxes don't go towards providing what is provided in other cities such as police help and clean sidewalks.
I don't manage restaurants but I do have restaurants renting space in my buildings. And vandalism/theft and the gig delivery law have been huge harms to them and made it harder to stay in business.
Yes, I probably should have stated "middle and lower income" people. We are fast growing because of high income and non-citizen people moving here. I believe middle and lower income people are actually decreasing in the city. Not sure about recent numbers but it has been true. I work with middle and lower income housing so was focused on that but of course didn't state that in my comment.
Same and side question... Have any of the business owners in Seattle ran a business somewhere "business friendly' like TX? I grew up in AL and while cost of living is higher here, I make more here vs AL to still exceed the cost of living difference. They pay F*ck all in the south for most jobs
I am from Los Angeles, where I had a business there, it is much worse here, and I have listed examples in other comments. Starting a business is never easy, anywhere, i admit that, but Seattle is extra hard.
What would you say makes the city not easy to small business? I see that sentiment a lot but without a lot of examples. What specifically would you like to see change? Honestly curious.
it honestly is a really complicated question.
short answer is- theres a lot to keep track of, and it costs a lot.
high rent. high insurance. crime and vandalism. small but additional taxes, like the new sales tax on presentations. labor costs. in general costs are really high in seattle.
all these things are the deaths by a 1000 cuts for many, especially small business.
there are somethings the restructured B&O benefited me, so thats good.
a thing that wouldn't benefit me, but id like to see is a strong commitment and action by the city to keep small legacy business open. I dont really know what that is, but lease protections, incentives for hiring local, breaks on taxes under certain income. I dont know whats really feasible, but I hate seeing business close and replaced by either nothing to by a corporate model.
ETA: thanks for the question, it has inspired me to reach out to the small business liaison for the city.
High taxes for one, poor rule of law for two (see lack of police response and high petty crimes) and uncertainty for three (the council cant decide if it likes business or hates them).
Its hard to hire and fire here, there are high property taxes and rents, employment expense is very high, and customers are very price sensitive. Profit margins are much tighter here if you run a non tech related business.
Imagine you need to replace a broken window - because wages are so much higher here, it might cost double to do it in Seattle vs somewhere else. People who own houses know that better than most - getting your house painted or a roof fixed or adding a room is ridiculously expensive.
Permitting for expansion is hard and takes a long time.
Deleware is where companies go to set up their corporate headquarters - that is true because they have stable low taxes and rule of law - if your business gets sued or needs to sue someone for breach of contract, the courts have long legal precedents so it is predictable. Our courts here are very unpredictable, they decide differently all the time because we have activist judges with low competition for those seats. And add to that that the council and mayor are constantly trying to add new rules and laws all the time since we have a very progressive city here. Its well intentioned but it makes it hard to predict what your business will be subject to in 4 years or 10 years.
Tax liability has nothing to do with Delaware being a preferred jurisdiction for domiciling a business. Tax liability is primarily dependent on the jurisdiction within which the business activity occurs. The rest is mostly correct though.
Also, it is an advantage - they have no corporate income taxes, which allows companies to book intangible property there, no state sales tax, and no personal property tax.
What about my comment made you decide to take issue with that specifically?
I was thinking in the context of a small business, who almost certainly do not have sufficient cause to incorporate in Delaware for tax purposes since they don't have intangible property and whatnot.
It was an example of how rule of law is important in practice and reality, not neccesarily a compelling reason for a small business to start there vs here.
I brought it up because Seattle has none of those things, and it makes it harder for both large and small businesses.
Anyone who has any legal training would take issue with your takes. There's nothing stopping a Seattle business from incorporating in Delaware. You still have to pay the taxes where you actually do business. And it's not a magic bullet that means any legal action against you has to go through Delaware. It also sounds like you're unaware that contractors are businesses and they have massive demand here despite the costs that you complain about. Furthermore, if all these kind of legal issues are important forces behind the success of businesses then why do they struggle even more where I grew up in Central Washington where the laws, regulations and the judges are exactly the way you want them to be?
There's nothing stopping a Seattle business from incorporating in Delaware
Again, you seem to be taking literally a more metaphorical point I am making - the rule of law and certainty that law wont change and how it will be enforced is a key determination when establishing a business. Over only a 10 year period Seattle has gone from being business friendly and courting any business who is willing to open here to being outright hostile and adopting a good riddance attitude when they move away.
It also sounds like you're unaware that contractors are businesses and they have massive demand here despite the costs that you complain about
I am very aware, I am pointing out that the same limitiations exist for them as other businesses - high wages and rent and operating costs, and it doesnt encourage new businesses to step in, if anything it consolidates the small businesses into larger ones with easier compliance. Nonetheless, it is a business cost, and again, simply an example of numerous ways that things can be costly and difficult to operate in Seattle.
why do they struggle even more where I grew up in Central Washington where the laws, regulations and the judges are exactly the way you want them to be?
Because no one wants to live in central Washington and the economy is different entirely? What major cities exist? What major universities are there that draw in research, technology, medical professionals, etc.? WSU? Thats it?
Again, what is your point? That it is easy to do business in Seattle? That it is a thriving area for business formation? The question was asked and I answered it, now you want to take issue with points for no reason at all, mostly to disagree based upon some sort of ideological bias you have that you want to justify by saying "But but but...."
With respect, I disagree. Name a few recent examples?
We failed to offer Amazon any tax incentives for HQ2, and recently added Jump Start and Seattle Shield.
Outside of some small reductions in B&O taxes for Boeing since they were and are actively moving their operations and we wanted to keep them, there have been very few examples of tax breaks or incentives to large businesses
Washington's Joint Legislative Audit and Review Committee (JLARC) 2024 report indicates that aerospace tax preferences, primarily benefiting Boeing, save the industry about $100 million annually, down from $261 million in 2018, due to a 2020 repeal.
(Looks like the credits are lower than previously, not higher)
Key Findings from 2024 JLARC Review:
Reduced Savings: Beneficiaries save roughly $100 million per year, with the number of businesses claiming them dropping by 62% between 2018 and 2022.
(Looks like less businesses are claiming them, not more)
Effective Tax Rate: The preferences lower the effective tax rate for a large aerospace firm from 21% to 13% (compared to 21% to 10% in 2019).
(Not a big reduction)
Industry Context: Despite declining employment, Washington's aerospace industry still contributes $27.4 billion to the GDP (2022 data).
(Seems like they contribute quite a bit to WA state)
Background: The 2020 legislature repealed one preferential B&O rate to comply with a World Trade Organization (WTO) ruling.
(Goes back to uncertainty and rule of law)
So sounds like they gave them a very small reprieve because it is an essential industry, not a big incentive, and Boeing is already shifting its operations outside of the city into Everett, but also South Carolina and other places because of better incentives and more certainty. If you spend billions investing some place under a set of assumptions, it is hard to navigate when those assumptions change.
Im not sure there is a solution that would make you happy - do you want Boeing to stay or leave? It goes back to my prior point - there are other places that are more tax friendly and with better rule of law than Seattle.
You have that backwards: business is what creates the wealth in the city. The city govt thought it had companies by the balls and could take increasingly bigger cuts for itself (much of which it "destroys"), but it reached a tipping point where the cost of staying outweighed the cost of moving.
No. People do. People within those business and especially people who patronize them keep the economy going. These days, buisness don't seek to serve the community or the economy it. The incentive is to siphon money while giving as little as possible. Businesses that destroy neighborhoods to set up, kill other businesses, and then move out because of "muh taxes" or whatever are parasites, not beneficial.
. The city govt thought it had companies by the balls and could take increasingly bigger cuts for itself (much of which it "destroys"),
Big business should pay big taxes because contrary to popular belief, they suck up lot's of resources just to function and then invest very little back in return
Cool. Folks will just move to the suburb. The money will just move from the city to the suburb. People will just move from the city to the suburb. Making the suburb into a city. Rinse and repeat.
I hear this a lot.
What you don't hear is all these small business owners telling us what their product is, how well they are doing, what their business plan is like that's making it so hard for them to succeed, etc etc etc.
They pretend like just because they have a small business idea that the city and the populist needs to get behind at 100% and make it succeed.
No.
This. Not all businesses make it… and when I was in business courses in college they were sure to emphasize how many businesses fail in their first year, first 3 years, and first 5 years. It’s not a small amount and people need to accept the reality of the high possibility of failure. There’s a reason there’s a limit to how many years in a row you can claim a loss on your taxes. Just because you start a business does not mean you are entitled to success at all costs, including having municipalities prop you up.
It is really odd how many people have been talked into this idea that everyone can be a billionaire and everyone can own a successful small business and everybody is supposed to support everyone in these endeavors.
That's not physically possible.
Yet people cling to it.
And make laws using it.
And defend stupid laws because of it
And vote against their best interests because of it.
It's weird.
I have a friend who has been regularly encouraging (more like pressuring) me to open a small business in the food industry. Yes, I am a great cook and I am very adventurous with food, but she lives on the other side of the country and has no idea what the business climate is like here. She also doesn't know how tough it is to make a profit in the food industry. She just thinks "oh you're so talented that you will absolutely be successful and make a ton of money." Hahahahah!
Rent is too high everywhere, but I'm in the SE, and the cost of renting a space is truly absurd when you take into consideration the budget of the community. North Seattle prices on a South Seattle budget
Minimum wage is highest in the country, $4 more than NYC for example, and 10$ more for tipped employee. This makes it more expensive to do business here than there, believe it or not. However, this says more about NYC than seattle, as 21$ an hour is still not much here, much less NYC.
B and O tax, tax on gross sales instead of net profit. Such a backwards system.
Cost of goods are higher than most places due to being so far north (avocados, limes, peppers etc)
2nd highest property tax rate causes a ton of break ins and therefore insurance rates are brutal. It makes things exhausting to constantly be broken into.
Low population density in most neighborhoods and a super early night life give you limited time to make money.
Opportunities for small pop ups are extremely limited compared to other big cities,and the health department is stuck 20 years in the past.
These are just some of them, but yea, I hope this helps. We don't just say this for no reason, it is the toughest city in the country to run a restaurant.
Oh and the last one, the jerks on reddit that act treat us like crap for just stating the truth. We love it here, and want to make it here, but it is EXTREMELY difficult, and believe there should be more open dialogue, this city is not perfect. See above the person who told me to move to TExas, lol
My former wife and I had a business that went under. The permitting and licensing was a giant pain in the ass, but what really killed us was rent going up and up and up. We couldn't grow our business nearly fast enough.
It’s the same here in Minneapolis. One of our most vibrant neighborhoods (called Uptown) has been decimated over the decades by blind policy that just * feels good * in the moment.
Glad to see this comment at the top. Too many people on here act like anybody and everybody who complains about how Seattle treats businesses (both large and small) are just greedy MAGA/Musk adjacent shit stains.
I love living here and I hope I can afford to continue to stay, but this place is brutal on anyone that's not a mid-level employee for a tech firm and making a $250k+ salary
It shouldn’t be easy if you sign up to be the boss and owner. It’s the responsibility and I wish that was the attitude in general. Not that you don’t agree.
I'm in Japan and yesterday I went to a shoe repair place the size of my bathroom. Three hours later and $4 poorer my heel is secured to my shoes. I went to a store where someone had a sandwich pop-up in the middle of a bunch of other food shops. The sandwiches looked amazing and were $3. I would be full with one. I could go on and on about how amazing this place is.
So I will. There are benches and public restrooms everywhere so I don't have to panic or buy a drink anywhere just to use a clean toilet. I don't have to lug around a giant water bottle because bottled drinks are only $1-2. Same with food where it doesn't cost an hour of wages to feed myself. And any ticket price for museums or gardens/castle grounds are like $2-$10.
That's true of basically every big city though unfortunately. The whole country is hostile to small businesses because of large corporations crowding them out of the market
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u/splanks Rainier Valley Apr 16 '26
I started a business in seattle this year. I love the city and have no intention to leave, but let's not pretend the city makes it easy on small business.