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1/10th of 1 Percent Sales Tax Increase

1/10th of 1 Percent Increase to Sales Tax in Support of Affordable Housing Takes Effect July 1

FOR IMMEDIATE RELEASE

June 30, 2021

 

MEDIA CONTACTS

Tanisha Jumper, Media and Communications, tjumper@cityoftacoma.org, (253) 591-5152
Maria Lee, Media and Communications, maria.lee@cityoftacoma.org, (253) 591-2054

1/10th of 1 Percent Increase to Sales Tax in Support of Affordable Housing Takes Effect July 1

 

TACOMA, Wash. – With the City Council’s passage of Substitute Ordinance No. 28747 on March 30, 2021, a sales tax increase of 1/10th of 1 percent in support of affordable housing takes effect tomorrow, July 1. 1/10th of 1 percent equates to 1 cent of sales tax for every $10, or a dime of sales tax for every $100, of retail sales.

The funding from the additional 1/10th of one percent sales tax is estimated to raise between $4.5 and $5.5 million on an annual basis and, if bonded against, is projected to raise substantial upfront funding of between $15 and $20 million and would allow for quick deployment of resources to respond to new opportunities or emergent needs that may arise. 

 

Passage of Substitute Ordinance No. 28747 also allowed the City to coordinate with the Washington State Department of Revenue and begin collection of additional funds while concurrently developing a strategy for the deployment of tax revenue. 

 

“To ensure that this important funding best meets Tacoma’s need for affordable housing, a strategic spending plan will be developed by staff in coordination with community stakeholders outlining how the additional revenue will be spent and presented to the City Council for approval prior to the use of any funds raised,” said Mayor Victoria Woodards. “After review by the Council’s Community Vitality and Safety Committee, the plan will be presented to Council in the fall of 2021.”

The State statute requires use of the funds be allocated and utilized within the parameters summarized below: 

At least 60 percent of funds
  1. Constructing affordable housing – including new units within an existing structure and facilities providing housing-related services;
  2. Constructing mental and behavioral health-related facilities;
  3. Funding operations and maintenance of new affordable housing and facilities where housing-related programs are provided, or newly constructed evaluation and treatment centers

Remaining funds Used for operation, delivery or evaluation of mental and behavioral health treatment programs and services or housing-related services

 

Eligible populations include the following population groups in Pierce County at or below 60 percent median income:

  • Persons with behavioral health disabilities;
  • Veterans;
  • Homeless, or at-risk of being homeless, families with children;
  • Unaccompanied homeless youth or young adults;
  • Persons with disabilities; or
  • Domestic violence survivors

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