Twitter receives tax holiday windfall from City of San Francisco

The San Francisco Board of Supervisors has voted to extend a new employee payroll tax holiday to Twitter, reports the Los Angeles Times. Over six years, Twitter will enjoy a 1.5 percent payroll tax shelter. While San Francisco Mayor Edwin Lee sees this as an optimistic step toward keeping Twitter around and revitalizing sagging business districts within the city, critics view the ordinance as a major misstep toward allowing corporations to hold cities as economic hostages. Resource for this article – City of San Francisco grants Twitter a payroll tax break by MoneyBlogNewz.

The necessity that Twitter is as ‘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.”

Lee said that he appreciated Twitter's help in those districts to the San Francisco Chronicle although Twitter officials did not make a statement about the Wednesday tax exclusion. Those areas need some job creation. It would help out San Francisco a lot.

“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.”

Companies 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 states. 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."

Citations

Los Angeles Times

latimesblogs.latimes.com/technology/2011/04/twitter-gets-6-year-payroll-tax-break-from-san-francisco-board-of-supervisors.html

San Francisco Chronicles

sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/04/05/BA7R1IQM9D.DTL

San Francisco Mayor's Office

sfmayor.org/index.aspx?page=330

Minnesota Gov. Tim Pawlenty on corporate tax holidays and offshoring

youtube.com/watch?v=MIRncAiu9Vw