Businesses in San Francisco’s Mid-Market district skirted nearly $34 million in city payroll taxes last year thanks to a controversial incentive program known as the “Twitter tax break” intended to keep tech firms from fleeing for Silicon Valley.
That sum, published in a report released Monday by the San Francisco Controller’s Office, increased by about $30 million from 2013 and is five times greater than the amount of taxes companies avoided in the two previous years combined.
The increase can be attributed, in part, to the fact that the city includes stock options in its payroll tax calculations, city officials said. Several Mid-Market companies have gone public since the incentive went into effect in 2012, including Twitter in 2013 andZendesk last year. The 2013 figures didn’t include Twitter’s $25 billion initial public offering nor Zendesk’s $100 million IPO.
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