May 14 (UPI) -- The Seattle City Council unanimously approved a tax on big businesses to help alleviate the city's growing homelessness problem and lack of affordable housing.
The tax, which has been unofficially nicknamed the "Amazon Tax," -- named after the online retailer which is headquartered in Seattle -- will affect businesses that generate annual revenue of $20 million or more, the Seattle Times reported. Those businesses, about 3 percent of all businesses in the city, will pay an extra $275 per full-time employee each year over the next five years, at which point the tax will expire.
The tax is expected to generate nearly $47 million, which will be used to build 591 low-income housing units by 2023.
According to the Housing for All Coalition, Seattle needs more than 27,000 affordable housing units for households earning less than $24,000 annually.
After the Seattle City Council vote on Monday, the Transit Riders Union, which is affiliated with the Housing for All Coalition, said the new tax would begin alleviating the city's housing crisis.
"Is this bill everything we hoped for? No. Is it a major step forward? Absolutely," the Transit Riders Union said in an email to supporters, according to the Seattle Times.
The original tax proposal was nearly twice as high and would have generated close to $80 million. But city council members chose to approve a thinner version of that proposal.
Amazon is the city's largest private employer and will pay the most under the new tax law. The company lobbied against both tax proposals and Drew Herdener, an Amazon vice president, said the retail giant was disappointed in Monday's vote, according to The New York Times.
"We remain very apprehensive about the future created by the council's hostile approach and rhetoric toward larger businesses, which forces us to question our growth here," Herdener said.