(The Center Square) – Seattle’s third quarter revenue report reveals gains in business and occupation tax revenue were largely offset by lower revenues from property taxes, licenses, permits and interest income.
Overall, total general fund revenue through the first nine months of 2025 reached $1.12 billion, exceeding the Seattle Office of Economic and Revenue Forecasts’ projection by about $1.5 million, or 0.13%. This represents a 26.6% increase compared to the $888.2 million collected during the same period in 2024.
The revenue report highlights B&O tax revenue as a key driver, totaling approximately $193.3 million through September, which is $7.4 million above the August forecast. Approximately $4 million of this surplus reflects pending refunds that have been requested but not yet fully processed, temporarily inflating revenue figures. Once these refunds are fully processed, the money will be paid out to businesses, and the revenue figures will be reduced accordingly.
Historically, B&O revenues through the end of September generally account for about 48.5% of the annual total, according to the report.
Seattle City Council President Sara Nelson emphasized the significance of B&O tax performance as an indicator of economic vitality.
“The higher than anticipated B&O tax revenue is a welcome indication of increased business activity,” Nelson said in an emailed statement to The Center Square.
However, she noted that that next week’s revenue forecast will provide more information about the city’s overall budget situation going forward.
As for property tax revenue, the city has collected $213.1 million, $1.5 million less than expected. As of the end of September, the city has received 54.8% of the total forecasted receipts for 2025.
The Seattle Office of Economic and Revenue Forecasts will release its next revenue update on Oct. 20.
In August, the Office of Economic and Revenue Forecasts anticipated year-end total in B&O tax revenue was set at $383 million. That forecast also decreased 2026 general fund revenue by $6.8 million. Tom Mikesell, legislative fiscal policy analyst, noted in Wednesday’s budget committee meeting that baseline revenue growth, which is 2.2%, is lower than inflation at 2.8%.
“That’s not exactly a great sign, because that indicates loss of revenue base,” Mikesell said.
The Seattle City Council is in the midst of its deliberations on the 2026 budget. For the foreseeable future, council members will continue to work to address general fund deficits. The general fund financial plan published with the 2026 revised budget projected an average deficit of $89 million in 2027 and beyond.
