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OTOH it seems like a dumb move by the city to offer these tax breaks to twitter in the first place. Were they really going to up and move to mountain view? To s

by awongh 13y ago

OTOH it seems like a dumb move by the city to offer these tax breaks to twitter in the first place. Were they really going to up and move to mountain view? To save on payroll tax? I'm not sure what the precedence for something like that happening is, but it seems highly unlikely.

capkutay 13y ago
? Why would a company pay tens of millions to the government when they can either report that same money as profit or invest it back into their company? A company like Twitter would not lose talent by having their headquarters in one of the suburbs in the peninsula (palo alto, redwood city, mountain view). Google, Facebook, Oracle would all be precedence for that case being that they're all located in the peninsula and not San Francisco.
jroseattle 13y ago
The precedence is very real, and it's gone on for years. Companies will up and relocate when it makes fiscal sense. Boeing, for example, was headquartered in Seattle for decades -- very established, entrenched locally, big production plants nearby. Chicago came along and offered serious tax breaks if they would relo HQ. This isn't down the road -- it's Seattle to Chicago, involving something like 1000 employees and their families. Boeing took the deal and gained millions in tax concessions. At the time, Twitter did an evaluation of payroll & stock option taxes and determined that it would be worth a lot of money to everyone (it's not just the company, it's the people) if they have a shop outside SF geographic boundaries. Pick up and move down the street? Yeah, easy choice.
raldi 13y ago
They don't have to "up and move" all at once; they could easily have just capped their SF headcount and expanded offices in other cities. Then the CEO starts spending more and more time in one of those "remote" offices, then they declare that desk to be their primary location, and before you know it, the company's de facto HQ is somewhere else.
abalone 13y ago
You're talking about the payroll tax holiday. You may be right about that, if we're only discussing a small tax on paychecks. But I'm talking about the options tax provision specifically. If this were enforced, successful startups would be faced with a MASSIVE, GIGANTIC tax bill. It's theoretical; no city has actually taxed stock options before (that I know of). So whatever your impression of local city tax is, throw it out. This would literally tax the rise in value of a company, so, tens or hundreds of millions of dollars.. in local city tax. Yes, every single startup would move out of San Francisco if the city actually taxed stock options.

by awongh 13y ago

capkutay 13y ago

? Why would a company pay tens of millions to the government when they can either report that same money as profit or invest it back into their company? A company like Twitter would not lose talent by having their headquarters in one of the suburbs in the peninsula (palo alto, redwood city, mountain view). Google, Facebook, Oracle would all be precedence for that case being that they're all located in the peninsula and not San Francisco.

jroseattle 13y ago

The precedence is very real, and it's gone on for years. Companies will up and relocate when it makes fiscal sense. Boeing, for example, was headquartered in Seattle for decades -- very established, entrenched locally, big production plants nearby. Chicago came along and offered serious tax breaks if they would relo HQ. This isn't down the road -- it's Seattle to Chicago, involving something like 1000 employees and their families. Boeing took the deal and gained millions in tax concessions. At the time, Twitter did an evaluation of payroll & stock option taxes and determined that it would be worth a lot of money to everyone (it's not just the company, it's the people) if they have a shop outside SF geographic boundaries. Pick up and move down the street? Yeah, easy choice.

raldi 13y ago

They don't have to "up and move" all at once; they could easily have just capped their SF headcount and expanded offices in other cities. Then the CEO starts spending more and more time in one of those "remote" offices, then they declare that desk to be their primary location, and before you know it, the company's de facto HQ is somewhere else.

abalone 13y ago

You're talking about the payroll tax holiday. You may be right about that, if we're only discussing a small tax on paychecks. But I'm talking about the options tax provision specifically. If this were enforced, successful startups would be faced with a MASSIVE, GIGANTIC tax bill. It's theoretical; no city has actually taxed stock options before (that I know of). So whatever your impression of local city tax is, throw it out. This would literally tax the rise in value of a company, so, tens or hundreds of millions of dollars.. in local city tax. Yes, every single startup would move out of San Francisco if the city actually taxed stock options.