The Seattle City Council passed it unanimously in a 9-0 vote.
Amazon, the city's largest employer with 45,000 workers, would take the biggest hit.
The tax also would hit such Seattle-based stalwarts as coffee retailer Starbucks and department store chain Nordstrom, as well as California-based tech giants like Apple, Google and Facebook that have enough of a presence in Seattle that they would be subject to the new levy.
The move by Amazon to create HQ2 - a second headquarters elsewhere - has stoked fears that Seattle's liberal politics will turn off the company. More than 100 people marched through Amazon's campus Saturday and held a rally outside the company's new spherical greenhouses, some holding signs saying "Tax Amazon". The tax expires after five years with the option to renew it.
Residents showed up two hours before the vote Monday to wait in line and claim a space in the chamber, which was packed to capacity.
Durkan, many businesses such as Amazon and construction-worker unions opposed it, as did Council President Bruce Harrell, Councilmembers Sally Bagshaw, Debora Juarez and Rob Johnson and some voters critical of how City Hall has been spending money. "So you're either well-off and hungry or homeless and well fed".
Council members were working on the deal past midnight Sunday, they said.
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But Luke said, 'I think it is too premature to say if the Legislature or the public would be in support of it ( sports gambling). So my reaction right now would not be an informed one in terms of what impact legalized sports gambling might have.
John Boufford with the International Union of Painters and Allied Trades said he didn't understand rhetoric against Amazon, which he noted provides good jobs for thousands of people.
Some opponents of the measure called for greater accountability on how funds addressing homelessness are spent. A count past year found King County's homeless population to have reached more than 11,000, and a pro bono report issued last week by McKinsey & Co. for the Seattle Chamber of Commerce found that it would cost about $400 million to address the shortage of affordable housing in the area. "The results are getting worse every year", he said.
Businesses and others who say the tax is misguided and potentially harmful question whether the city is effectively using the tens of millions of dollars it already spends on homelessness each year. The Seattle region had the third-highest number of homeless people in the US and saw 169 homeless deaths past year. Seattle home prices are rising faster there than anywhere else in the country.
Under the amended tax, Amazon will be on the hook for about $11 million annually, rather than the $20 million that the original proposal would have levied. That figure could quickly rise when the funding mechanism would transition to a payroll tax. Healthcare companies are exempt, as are non-profits.
In a 8-1 vote, the council - some reluctantly - chose a new version of the plan introduced as Amendment 24 during the afternoon full council session with sponsorship from eight of the nine members - all save Capitol Hill's District 3 rep, Kshama Sawant.
The head tax approved on Monday is not the first. However, a tax on jobs at any level is bad economic policy and will negatively impact Seattle's economy and city tax revenues.
Scruggs reported from Seattle.