X

Twitter Wringing $22M From Strapped Frisco

Company threatens to leave San Francisco without payroll tax break
By Mary Papenfuss,  Newser User
Posted Apr 7, 2011 2:37 AM CDT
Updated Apr 7, 2011 4:51 AM CDT

(Newser) – Pity poor Twitter. After recently raising $200 million on a $3.7 billion valuation, it doesn't want to cough up a city payroll tax. So the company is on its way to winning a major tax break from struggling San Francisco after threatening to leave its city digs for the 'burbs. The exemption on the tax—which levies a 1.5% charge on worker compensation—is about to be granted for new employees hired in the next six years at larger companies in a specific downtown area. It's clearly aimed at Twitter, which could hire as many as 2,000 workers in that time, saving the company an estimated $22 million. Twitter had hoped for a total exemption on all workers, not just newbies, for eight years. Supporters say the move, which will likely be finalized next week, is an incentive to keep firms in a city running out of money and slashing services.

story continues below

"The bottom line is, if we don't do this we will not have their payroll to tax. Companies will leave," a city supervisor tells the San Francisco Chronicle. Critics characterize it as corporate welfare and a form of extortion. "If we're going to allow a company to threaten to leave, and give them a tax break so they don't, we're setting a really bad precedent," said another supervisor. "Part of social responsibility is paying taxes." The real rub is in Twitter's marketing itself as a good-guy business, notes Gawker. "Young companies like ours are well positioned to build altruism into the corporate culture from an early stage," Twitter co-founder Biz Stone boasted last year. (Read more Twitter stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
X