Twitter tax break approved by San Francisco supervisors

San Francisco will remain the home of the tweet after a contentious tax break on new hires was approved Tuesday for the Mid-Market area where the growing micro-blogging service committed to relocating only if The City cut business costs.

The proposal sparked a spirited ideological debate in recent months, prompted other tech companies to ask for tax breaks, and inspired renewed interest in overhauling how The City taxes its local businesses.

The San Francisco Board of Supervisors voted 8-3 Tuesday approving an exemption of the 1.5 percent payroll tax on new hires for companies in the Mid-Market area. Twitter will enjoy the tax break, valued at about $22 million, for six years. Supervisors David Campos, John Avalos and Ross Mirkarimi opposed the deal.

Twitter was exploring a move to Brisbane — which does not charge a payroll tax — prompting The City to come up with a cost-savings measure to prevent the loss of the tech company.

“Our payroll tax is one of [Twitter’s] biggest headaches,” said Board of Supervisors President David Chiu.
The legislation also builds on The City’s efforts to revitalize the Mid-Market area long plagued by high vacancy rates and crime.

Opponents of the deal — including The City’s largest union, the Service Employees International Union, Local  1021 — said the tax break would set a bad precedent and was “aiding and abetting” the disparity of wealth. 

“Working-class people, we’re getting dinged. We’re paying taxes and we are losing services,” Avalos said. “It makes sense that the corporate sector can pay their taxes.”

Supervisor Jane Kim, a backer of the legislation whose district includes the Mid-Market area, said the exemption was “carefully tailored” and “offers hope to revitalize a long neglected part of our city.”

Twitter officials said they would move into the former San Francisco Mart building at Market and Ninth streets if the tax break was approved. Its workforce is projected to increase from 250 to 3,000 by July 2013.

Mayor Ed Lee praised the approval in a statement. “This new partnership with Twitter represents just one example of how the City can work collaboratively with businesses, community-based organizations, property owners, and area residents to catalyze meaningful change in this neighborhood.”

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