SEATTLE — Amazon abruptly escalated a fight with its hometown on Wednesday, halting major expansion plans in Seattle because of a tax being considered by the City Council.

The new tax would charge large employers in the city about $500 per employee, with the money going to help alleviate a housing crisis. The tax is squarely aimed at Amazon, which is Seattle’s largest employer and frequently blamed by many residents for the city’s soaring housing costs.

The company said it would halt construction of a new building it was planning to erect downtown and reconsider occupying another that is already under construction, putting 7,000 or more jobs in jeopardy.

Late Wednesday morning, Drew Herdener, an Amazon spokesman, said that “pending the outcome of the head tax vote by City Council, Amazon has paused all construction planning” on a large building in downtown Seattle that was scheduled to begin construction later this year. Mr. Herdener also said Amazon was “evaluating options” to lease out space it had planned to use in another building that is already going up elsewhere downtown.