Twitter among SF tech companies that may face new payroll tax
OREANDA-NEWS. June 30, 2016. Twitter, Zendesk and a host of other tech companies may face a U-turn in San Francisco's favorable tax policies if a proposal by two city supervisors to reintroduce payroll levies gains traction.
Late Tuesday afternoon, city supervisors Eric Mar and Aaron Peskin introduced a ballot measure that would institute a 1.5 percent tax on the payrolls of the city's tech companies. Revenue from the tax, which Mar estimated could total \\$120 million a year, would be earmarked to address San Francisco's chronic homelessness and shortage of affordable housing.
Six of the city's 11 supervisors need to approve the measure for it to appear on the ballot in November. The supervisors could vote as early as August.
The proposal represents the increasing discomfort many San Franciscans feel about the influence of tech companies and their money on the city. An influx of relatively well-paid techies has pushed up prices, particularly rents, and made the city one of the most expensive in the country.
"The surge in housing demand brought on by the rapid growth of tech sector and its highly paid workforce makes it increasingly difficult for working people to remain in their homes in San Francisco, live near where they work, and contribute to our city," Mar said in an email. "By making tech corporations pay their fair share (in taxes), we can better keep small business running and ensure everyone who calls San Francisco home."
The measure would also lower registration fees for small businesses with gross receipts of \\$1 million or less, Mar added.
Known as the Homeless and Housing Impact Technology Tax, the proposal comes after San Francisco revised its tax structure four years ago from a payroll tax to a gross receipts tax. Mar and others say that benefits tech companies.
That 2012 revision came a year after the city adopted the controversial "Twitter tax break," which eliminated taxes involving payroll and stock options for six tech companies, including customer service software firm Zendesk, as an incentive to house their headquarters in the city.
The deal saved those companies a combined \\$34 million in payroll tax in 2014 and has been credited by Mayor Ed Lee and civic leaders with revitalizing parts of the city's rugged Mid-Market and Tenderloin neighborhoods.