Twitter deal has San Francisco looking for ideas to help more companies 

A proposed tax break for Twitter has forced San Francisco to examine ways to cut costs for other tech companies.

City officials have long acknowledged the need to change the way they tax businesses. But the proposed payroll tax exemption on new hires for companies moving to the mid-Market Street area — where Twitter has said it will move if the exemption is approved — is forcing the issue. Officials from other tech companies say they are concerned about costs, specifically how stock options are taxed by the 1.5 percent payroll levy if a company goes public.

With the Board of Supervisors set to vote on the mid-Market tax break April 5, members floated various ideas Tuesday to address the concerns.

Board of Supervisors President David Chiu requested that the Controller’s Office, the treasurer and other officials draft legislation to address the stock-option issue. Chiu, along with Mayor Ed Lee, also is supporting the formation of an ad hoc group of yet-to-be named tech CEOs and investors to come up with policies to make The City more attractive to tech businesses.

Chiu had attempted to overhaul The City’s entire business tax system last year, but failed to generate enough support to bring it before voters. He is making another effort with a plan to put a measure on the November 2012 ballot.

Supervisor Ross Mirkarimi proposed to enact a two-year payroll tax exemption on stock options if a company goes public during that time.

Budget Analyst Harvey Rose was tasked with the job of studying what other tech hubs are doing to attract companies, at the request of Supervisor Mark Farrell.

Farrell said The City needs to address the concerns right away and not turn to a two-year temporary fix. One option he suggested would be to eliminate stock-option taxation altogether.


- Board of Supervisors President David Chiu’s proposal to reduce the distribution of Yellow Pages suffered a setback Tuesday.

Supervisor Sean Elsbernd and other colleagues said they wanted more time to gauge the impacts of the legislation, including having the Controller’s Office conduct an economic impact of the proposal to analyze claims it would result in 80 jobs lost.

A vote on the proposal was postponed until May 10. It would prohibit the delivery of Yellow Pages starting in May 2012 to anyone who has not requested them.

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