SAN FRANCISCO (AP) -- Supporters of a tax break intended to lure Twitter to San Francisco's blighted mid-Market neighborhood are pointing to a new report as an indicator of its success.
The report released Monday by the San Francisco Controller's Office finds that the city brought in $7.6 million more in business tax revenue last year from the area covered by the tax break than it had generated before the incentive. Meanwhile, the city gave up only $4.2 million in waived tax revenue.
San Francisco's Controversial 'Twitter Tax Break' Is Working, Report Finds
Supervisor David Chiu tells the San Francisco Chronicle the report confirms that the tax break is working.
It exempts Twitter and other businesses that move to the mid-Market or neighboring Tenderloin area from a payroll tax on new hires.
"Business have to pay a payroll tax in the city and it was an incentive to encourage businesses to locate in the Central Market area and it has effectively attracted a number of technology companies," Ted Egan, the city's chief economist who wrote the report, told KCBS.
According to Egan, the effort worked.
"About 19 businesses took the incentive over the three years but the number of businesses that moved to the area increased by 61," he said.
Opponents say there is no indication that Twitter and other companies wouldn't have stayed in San Francisco regardless of the tax break.
While many are touting the report's findings, KCBS, KPIX-5 and Chronicle Insider Phil Matier said that "jury is still out."
"We have a preliminary report that shows that the city has gained a couple of million bucks out the deal by giving these people tax breaks but the big tax breaks haven't been factored in yet—that's when they (Twitter) got to sell their IPO stock and weren't required to the pay taxes to the city," he said. "People are pointing fingers at the glass going, 'Wow! It's full; it's three-quarters full; it's all the way full—it's great,' but there's a whole other group on the other side saying, 'No, wait a minute; we are coming up short on this shared-economy deal," he said.
LISTEN TO THE FULL INTERVIEW:
Phil Matier: Are Tax Breaks For Tech Companies Benefiting San Francisco?
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