The Council passed the resolution to repeal the tax 7-2.
But late Monday, Mayor Jenny Durkan and City Council President Bruce Harrell, who decided on the reversal over the weekend, issued statements signaling the reversal and repeal of the "head tax" that the Seattle City Council approved 9-0 last month.
Amazon balked, and Seattle is backing down.
Local lawmakers in Seattle are poised to repeal a new tax on big businesses after receiving major pushback from local businesses like Starbucks and Amazon.
The revenue is meant to help fight the city's homelessness and affordable housing problems. It has resulted in one of the highest homelessness rates in the U.S.
"From Day 1, the No Tax on Jobs campaign has been a grassroots movement - and we want to thank our 2000 tireless volunteers and the more than forty-five thousand Seattle residents that signed the jobs tax repeal petition", No Tax on Jobs campaign spokesman John Murray said in a statement.
"We believe the best path forward is to implement the reforms recommended two years ago by the city's own homelessness expert", Kelly said in a statement.
"The announcement from Mayor Durkan and the City Council is the breath of fresh air Seattle needs", Marilyn Strickland, who heads the Seattle Metro Chamber of Commerce, said.
Tuesday's vote also comes as more eyes are turning to the calendar for the 2019 election that will see all seven of the council's district seats - including Sawant's D3 chair - up for grabs. Critics argued the tax would discourage investment in the city and place an undue burden on companies that were already paying a fair share of taxes.
The company recently said it would block Australians from purchases on its worldwide websites after the nation planned to impose a 10 percent consumption tax on online retailers for goods shipped to Australia. The debate unleashed tense local divisions, exposing the anxieties of being the fastest-growing big city in the U.S. It also offered a warning to cities looking to court Amazon for its second headquarters about the political tensions such rapid growth can bring.
While a report by McKinsey & Co. said the region needed to double its funding for homelessness, in particular to build more affordable housing, Amazon and the business community said new city resources weren't necessary. It would target businesses making at least $20 million in gross revenue and take effect in January.
In response to public pressure and signature gathering from No Tax on Jobs, a business-backed referendum campaign, the City Council held a special meeting to repeal the so-called head tax, or employee hours tax.
Amazon and some of the city's other largest employers, including Starbucks, quickly raised $200,000 to gather signatures for a referendum that would challenge the council's decision.
Sponsors of the tax said Seattle's biggest-earning businesses should bear some burden for easing a shortage of low-priced housing that those companies helped create by driving up real estate prices to the point where the working poor and many middle-class families could no longer afford to live in the city.
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