SF gives boost to Twitter tax break
The city's Board of Supervisors is one step closer to passing payroll tax breaks to businesses that move to the city's Mid-Market district. It's aimed at growing companies like Twitter.
Correction at 10:04 a.m. PT on April 15: This story initially mischaracterized the vote that occurred Tuesday. The San Francisco Board of Supervisors voted to pass the payroll tax legislation on first reading, but a second reading and vote is required. That is scheduled for April 19. The story's headline and text have been rewritten to reflect that reality.
SAN FRANCISCO--As expected, the San Francisco Board of Supervisors today moved closer to approving a payroll tax cap for some businesses willing to move to the city's Mid-Market neighborhood.
The legislation and subsequent amendments passed on first reading by a vote of 8 to 3.
The boardagreed to grant the tax breaks last week by the same margin, 8 to 3. Mayor Ed Lee has said he will sign the measure.
The legislation's initial approval should come as good news to growing businesses in the city, but the poster child for this effort has been Twitter. The company currently resides in a building in the South of Market neighborhood and has been considering a move out of the city due to San Francisco's high payroll taxes and rents. Other tech firms like social-gaming company Zynga and Yelp, all born in San Francisco, have also threatened to leave the city for similar reasons.
The vote today moved closer to capping payroll taxes for companies with a payroll of at least $1 million for the next seven years. That cap would remain even if the companies add to their ranks. Additionally, employee income from exercising stock options will not be taxed.
Critics have said the legislation will drive away residents from one of the few neighborhoods in San Francisco with affordable rents and will deprive the city of a valuable source of revenue.
But those in favor say it will revitalize an economically depressed neighborhood and encourage successful businesses to remain in a city whose tax structure has been increasingly unfriendly to businesses.
CNET's Kent German contributed to this report.