Board of Supervisors to consider tax exemption for Twitter, Mid-Market businesses Tuesday 

The San Francisco Board of Supervisors on Tuesday will consider a proposal to exempt payroll taxes for Twitter and other businesses who move to certain locations in The City's Mid-Market or Tenderloin neighborhoods.

The proposal would exempt payroll taxes for new employees for six years for companies that move to the area on or near Market Street between Fifth Street and Van Ness Avenue.

San Francisco's payroll tax, the only one of its kind in the state, levies the tax on any company with a payroll above $250,000.

Twitter, the microblogging company currently based in the city's South of Market neighborhood, is seeking a building with more office space, and has considered moving down the Peninsula to a city that has no payroll taxes.

But last month, Twitter sent a letter to Mayor Ed Lee, Board President David Chiu, and Supervisor Jane Kim -- three of the legislation's sponsors -- saying the company would move to the Mid-Market area if the exemption is approved.

The letter, sent by Ali Rowghani, the company's chief financial officer, said Twitter would sign a six-year lease at the San Francisco Mart building, located on the south side of Market Street between Ninth and 10th streets.

Rowghani estimated that staying in San Francisco under its current tax policy would cost Twitter more than $30 million over five years.

The proposal has drawn criticism from some local progressives, including former Supervisor Chris Daly, who came to a subcommittee hearing on the legislation last month to speak out in opposition.

"We're talking about giving away $22 million," the estimated amount of payroll taxes that would be lost in the proposal, "to a company valued in the billions," Daly said.

Other current supervisors questioned why the proposal was expanded to include other nearby businesses, and argued that other parts of the city are also in need of legislation to attract businesses.

But proponents, including the mayor, have argued that getting Twitter and possibly other tech companies to move to the Mid-Market or Tenderloin neighborhoods would invigorate a part of the city that is affected by blight and public safety issues.

"The transformative nature of an anchor tenant like Twitter will revitalize this community, create jobs and stimulate our economy at a time when we need it most," Lee said.

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