Tax on big tech firms could go to San Francisco voters

SAN FRANCISCO (KTVU) – A measure to tax big tech companies could end up on the November ballot in San Francisco under a plan being considered by the Board of Supervisors.

Supervisors Eric Mar, David Campos and Aaron Peskin are behind the proposal to impose a 1.5 percent surtax on big tech companies that make more than $1 million in revenue. The measure would also apply to tech companies with workers on the payroll in San Francisco even if the firm does not have an HQ in the city.

“We also exempt smaller tech companies $1 million of gross revenue and below so it’s going after the large companies to pay their fair share,” Mar said.

Mar said the city controller has estimated the tax would generate roughly $120 million annually. The money would be used to for housing and homeless needs. He introduced the proposal during the supervisors meeting on Tuesday.

The plan must receive support from 6 of 11 supervisors if it is to go before voters during the November election. The supervisors must indicate their support by Aug. 2, 2016 for it to move forward.

Also included in the measure would be an amendment to reduce the cost of small business registration fee by 50 percent each year.

The tech tax proposal, formally known as the “Housing and Homeless Services Impact Technology Tax,” has a coalition of support.

“In order to truly address homelessness in San Francisco we need a sustainable revenue source, we need to get serious about it. And to do that we need funding,” Jennifer Friedenbach, an official with the Coalition on Homeless said.

Kung Feng, who works with Jobs with Justice, supports the proposed tax, too.

“This is a huge step forward to address this housing crisis by asking the technology sector to pay their fair share and support real solutions for the housing crisis,” Feng said.

Several big tech companies in the mid-Market area received tax breaks worth millions of dollars to stay in San Francisco five years ago. It is believed that caused the housing crisis and numerous evictions in San Francisco.

In a written statement, Zendesk said the city must rely on all sectors to resolve the homeless problem and not just the tech industry.

"At Zendesk, we share the community's concern over affordable housing and addressing the needs of the homeless in San Francisco. It is an issue of importance to the many Zendesk employees who not only work in the city, but who also call this city home. It’s also been a persistent problem in San Francisco, one that was not created by the high-tech industry and one that cannot be exclusively solved by the technology community. At the moment, we believe it is premature for us to react specifically to Supervisor Mar's proposal without having an opportunity to understand the full details, but we will obviously be considering its potential implications for our business," the statement said. 

KTVU reached out to several other big tech companies, including Twitter, Uber, Google and Salesforce for comment. Twitter and Salesforce had no comment.

By KTVU reporter Cristina Rendon. 

Copyright 2016 KTVU-TV/FOX 2. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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