The San Francisco Board of Supervisors has approved a special tax break for Twitter Inc., a move that the city hopes will keep the social media company and other high-tech firms from relocating.
In an 8-to-3 vote, the supervisors approved an ordinance to give Twitter and others an exemption from a 1.5% city payroll tax for the next six years, as long as those businesses are located in the city's Central Market Street and Tenderloin areas, the San Francisco Chronicle reported.
Edwin M. Lee, San Francisco's mayor, applauded the move and said in a statement that it could lead to a rejuvenation of parts of the city that had struggled to attract businesses.
"This moment represents a real step forward in the effort to revitalize and transform the Central Market area," Lee said. "Central Market and the Tenderloin have been burdened with high vacancies and blight for decades."
Lee said the payroll-tax exclusion would be a powerful tool that could create needed jobs and services in the downtrodden areas.
"I would also like to thank Twitter for making a commitment to remain in San Francisco and for their enthusiasm about joining our broad-based effort to revitalize Central Market and the Tenderloin," he said. "There is great synergy between Twitter and the arts organizations and small retail businesses who are looking to expand in the area."
Twitter officials declined to comment on the approval of the tax break Wednesday.
The tax exclusion pertains to the newly hired employees of companies that move into or remain in the Central Market and Tenderloin areas over the next six years, the Chronicle reported.
Businesses, however, would still have to pay the 1.5% payroll tax on employees they already have.
Twitter had been on the fence about moving out of San Francisco or to a new location in the city.
With the tax exemption now passed, it is likely that Twitter will move into office space in the vacant Market Square building, also known as the San Francisco Mart building. Twitter had signed a letter of intent to move into the Market Square building if a payroll tax exemption was passed.
The tax break could lead to Twitter saving about $22 million over six years, the report said.