San Francisco considers variety of tech company tax breaks

San Francisco supervisors hope to move quickly to eliminate or modify a unique payroll tax on employee stock options to keep technology companies from fleeing the city. One plan, crafted by Supervisor Ross Mirkarimi, calls for a two-year moratorium on taxing the stock options "with the express purpose of stopping any hemorrhaging of companies who are on the cusp of leaving," he said. The temporary tax break would apply to technology companies that are located anywhere in San Francisco, have 100 employees or more and are not traded on a public stock exchange. His proposal and ideas crafted by Supervisors Mark Farrell and David Chiu are expected to be introduced today. The reforms are focused on the highly valued tech companies that face the largest tax burden if they go public. Several tech companies, including Twitter, Zynga and Yelp, have told city officials that San Francisco's tax code may make it financially unfeasible for them to stay in the city. San Francisco is the only city in California that taxes stock options, bundling the provision in the city's payroll tax, which also includes salaries, wages, bonuses and other forms of compensation. The 1.5 percent business tax is imposed on businesses with payrolls above $250,000.