City of San Francisco grants Twitter a payroll tax break

The “dead Twitter” graphic, complete with dead whale and lots of Twitter birds covering the carcass.

Is giving companies like Twitter huge take breaks killing local economies? (Photo Credit: CC BY-ND/Estupido/public var)

In an 8-to-3 vote, the San Francisco Board of Supervisors has decided in favor of an ordinance that will grant local company Twitter and others a tax break from the city’s corporate payroll tax on new hires, reports the Los Angeles Times. The 1.5 percent tax shelter will be good for the next six years, as long as companies like Twitter maintain their physical San Francisco offices. While Mayor Edwin Lee praised the move as a step in the right direction for maintaining the city’s popularity as a location for tech firms, critics believe such corporate tax holidays open the door for cities to be exploited by big businesses.

Twitter’s continued presence ‘a rejuvenation’

Offering Twitter a payroll tax break was necessary to keep the social media giant in San Francisco for years to come, said Lee.

“This moment represents a real step forward in the effort to revitalize and transform the Central Market area,” he said. “Central Market and the Tenderloin have been burdened with high vacancies and blight for decades.”

While Twitter officials would not comment on the payroll tax exclusion Wednesday, Lee told the San Francisco Chronicle that he appreciated Twitter’s enthusiasm for helping revitalize those key business districts. The creation of jobs and services in sagging geographic areas would benefit San Francisco across the board.

“There is great synergy between Twitter and the arts organizations and small retail businesses who are looking to expand in the area,” said Lee. “The city can work collaboratively with businesses, community-based organizations, property owners and area residents to catalyze meaningful change.”

Businesses will expect the tax holiday, critics claim

Over the next six years, the Twitter payroll tax break is projected to save the company about $22 million on its taxes, the Chronicle reports. That’s $22 million that San Francisco needs, said city supervisor John Avalos.

“I don’t believe giving an exception to our payroll tax is the way to go,” he said. “I believe that businesses in San Francisco and around the country should be socially responsible. … If we allow a company to threaten to leave, then give them a tax break so they don’t, we’re setting a bad precedent.”


Los Angeles Times

San Francisco Chronicle

San Francisco Mayor’s Office

Minnesota Gov. Tim Pawlenty on corporate tax holidays and offshoring

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