Property Developers Pounce On Tech Tax Break

Payroll tax cut designed for tech companies attractive to others

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    NEWSLETTERS

    Former mayor Gavin Newsom strolls down Market Street in the oft-derided, quite-blighted mid-Market area, where a tax break was supposed to attract tech companies. Instead, it has brought developers who may be lying about where the workers they employ are located in order to qualify for a payroll tax break.

    The Twitter tax break was supposed to encourage tech companies to move to the mid-Market area. And four have -- but many more other companies are taking advantage of its payroll tax break, according to the San Francisco Examiner.

    One of Mayor Ed Lee's first acts in office in 2011 was to offer a payroll tax break to any company who would move into office space in the mid-Market Street area. Twitter has now moved into office space at 1355 Market Street, rather than relocate from its old offices on Folsom Street to out of the city, as it had threatened to do.

    For the 2012 tax year, five of the 15 companies who have applied for the tax break are property developers, not tech firms, the newspaper reported.

    Three of the five applications were filed at the same address, 263 Golden Gate Avenue. That's where Landmark Construction, Dolmen Property Group and Urban West all claim to have offices.

    The two buildings where development companies asking for the break claim to have offices are a small office at 263 Golden Gate Avenue next to a construction side and a "boarded up" historic building at 973 Market Street. Nobody at either site was available for comment.

    San Francisco charges a 1.5 percent levy on employee payrolls, and Twitter would have been subjected to such a tax on its employees' stock options upon going public.

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