Washington could lose up to $750M in tax revenue as Starbucks expands in Tennessee

The warning comes after Starbucks announced a $100 million investment in Nashville, where it plans to move or hire 2,000 workers over the next five years, with operations expected to be fully up and running by 2027.

Analysts say the long-term impact could be significant. Washington Policy Center estimates the state could lose hundreds of millions in revenue as those jobs, and the associated tax base, grow outside Washington rather than in Seattle.

Tennessee leaders are celebrating the move. At a press conference, Gov. Bill Lee said the expansion reflects the state’s business-friendly environment and called it the kind of announcement “other states will be envious of.”

“We are extremely grateful for you and Brian and your team,” Lee said.

Seattle’s political messaging was a sharp contrast when Socialist Mayor Katie Wilson, who previously encouraged a boycott of Starbucks during a workers rally, came under fire this week after laughing off concerns about wealthy residents and businesses leaving the state following the passage of Washington’s new 9.9 percent “millionaire’s tax.”

"I think the claims that millionaires are going to leave our state are, like, super overblown. And if… the ones that leave… like, bye,” Wilson said, laughing. The company’s billionaire founder, Howard Schultz, recently announced he has relocated to Florida, just days after the millionaire’s tax was signed into law, joining Amazon founder Jeff Bezos, who already left the Evergreen State.

The day Wilson was elected, she joined striking baristas and told the crowd during the 2025 Starbucks labor protests: “I am not buying Starbucks and you should not too.”

The Nashville expansion is the latest development in a broader series of changes affecting Starbucks’ presence in Seattle. The company has announced five Seattle store closures, including multiple unionized locations, and previously shut down both of its flagship Reserve Roasteries. It has also laid off more than 900 workers in the Seattle and Kent areas. Sources previously told The Ari Hoffman Show on Talk Radio 570 KVI that Starbucks had paid out the remainder of a lease on a Seattle-area office and vacated the building ahead of the Nashville expansion, though the company has not publicly confirmed that detail.

According to Washington Policy Center analyst Ryan Frost, the financial incentives for moving jobs out of Seattle are substantial. Frost estimates Starbucks saves roughly $12,000 per employee per year by locating workers in Nashville instead of Seattle, citing Tennessee’s lower tax burden and Washington’s higher costs, including its business and occupation (B&O) tax, which is based on gross receipts rather than profits. “Seattle has such a higher tax burden than Nashville does,” Frost told Fox 13.

The shift reflects a broader trend. Washington was ranked the 6th best state for business in 2014 by the Tax Foundation. It now ranks 45th, according to the same measure. At the same time, Seattle’s office market has been hit by layoffs and downsizing. Major employers, including Amazon, Microsoft, and Meta, have reduced headcount in the region, contributing to record office vacancy rates above 35 percent downtown.

If Starbucks’ Tennessee workforce grows as projected, analysts say Washington could lose not only direct tax revenue but also the secondary economic activity tied to those jobs. For now, Starbucks maintains Seattle will remain its headquarters, but with 2,000 jobs headed to Nashville, stores closing locally, and executives leaving the state, the economic ripple effects are already being felt.