The Issaquah City Council approved new business and occupation tax rates at its regular meeting Monday night. The new rates were modified from those proposed by Mayor Fred Butler in October, eschewing a nearly double-rate increase on manufacturing/wholesale/retail businesses in favor of an across-the-board 50 percent increase on all applicable businesses.

The ordinance passed 5-2 on council vote. The updated rates would take effect at the onset of April.

The business and occupation tax, or B&O tax, is a municipal tax on a business’s gross receipts. Currently, product-based businesses — those in the manufacturing, wholesale and retail sector — are taxed at a rate of 0.08 percent, or eight-hundredths of a penny on every gross dollar earned. Service businesses — including printers and publishers, service retailers and other service providers — are taxed at a higher rate of 0.1 percent, or a tenth of a cent on every gross dollar.

In October, Butler proposed raising the 0.08 percent to 0.15 and raising the 0.10 percent rate more modestly, to 0.12 percent. At the beginning of 2017, the 0.15 percent rate would have increased again to 0.2 percent.

Representatives for the Issaquah Chamber of Commerce and several larger Issaquah businesses — including Costco and Darigold — objected to the proposed rates, calling the increase too steep.

Instead, 0.08 percent will become 0.12 and 0.10 will become 0.15, effectively flip-flopping the planned tax burdens on product and service businesses so that service businesses continue to pay a higher rate.

Preserved from Mayor Butler’s plan was a proposal to exempt businesses earning a gross of $100,000 or less. The proposal increased the exemption five-fold from the current rate of $20,000.

Not every councilman agreed with the new plan. Joshua Schaer said he believed a 50 percent increase — even compared against what would have been a 150 percent increase on product-based businesses — was too much. He voted against the ordinance.

“Imagine if the cost of pizza went up 50 percent from $10 to $15,” Schaer said. “That would add up quickly.”