Small business owners in Seattle say a newly proposed overhaul of the city’s Business & Occupation (B&O) tax could be a game changer.

Unveiled Wednesday by Mayor Bruce Harrell and Councilmember Alexis Mercedes Rinck, the plan would raise the B&O exemption threshold from $100,000 to $2 million in gross revenue. That means most small and mid-sized businesses would either pay significantly less or nothing at all—about 76% would no longer owe the tax, and nearly 90% would see their tax bill go down.

For business owners like Sokha Danh, who runs mam’s books in the Chinatown-International District (CID), the proposal is more than a policy shift—it’s a lifeline.

“As a small business owner in Seattle’s CID, this proposal will provide transformational savings for our bottom line,” Danh said. “I wholeheartedly am in support of Mayor Harrell and Councilmember Rinck’s progressive taxing model to make taxes less burdensome for small businesses to thrive and support their local communities.”

The plan—called the Seattle Shield Initiative—aims to generate $90 million a year to protect essential city services, many of which are at risk due to a projected $251 million budget shortfall and threats to federal funding under the Trump administration. Programs like housing vouchers, food assistance, and support for survivors of gender-based violence could all benefit.

The city plans to offset the tax breaks for small businesses by raising B&O rates on larger businesses, specifically those earning above $2 million. The change wouldn’t take effect until 2026 and would need voter approval in the November 2025 election.

Longtime CID restaurateur Eric Chan, who owns Jade Garden, said the impact would be felt immediately among his staff.

“As a small business for over 22 years our employees are the backbone and everything for us,” Chan said. “Most of our employees have been with us over a decade if not longer. Being able to reinvest these funds back to them would mean everything for us!”

Nhung Nguyen, co-founder of Adam Tailor, echoed that sentiment—and added a deeply personal note.

“I came to this country as a refugee and started our tailor shop with just a sewing machine and my hands,” she said. “For over 40 years, we’ve worked hard to keep our doors open. Mayor Harrell’s proposal helps small shops like ours continue—not just for me, but for my daughter and granddaughter, who are now carrying on this work.”

If approved, the tax structure would stay in place from 2026 through 2029, with an option to extend it for another four years.