The Twitter IPO Could Cost San Francisco Over $55M In Lost Taxes
Twitter’s shareholders will receive around $11 billion when the company goes public next week. Twitter has priced their shares at between $17 and $20. Twitter will also receive in about $55 million in tax savings as part of a tax deal with the city of San Francisco. Twitter agreed to “gentrify” mid-Market Street, which is one of the poorest city neighborhoods. This is more than twice the $22 million estimate.
San Francisco Chronicle and accounting firm James J. McHale, CPA of San Francisco determined that if all employees unload their shares at the midpoint of the pricing range, the lost revenue to the city could add up to $34 million. This is on top of the $22 million that the Board of Supervisors’ budget analyst said would be lost in payroll taxes over the six-year deal.
Twitter is expected to be involved in community projects, hiring locals, donating computer equipment, and local education. They have completed 18 out of 25 commitments this year so far. Twitter also donated $60,000 in sponsored tweets.
Twitter donated $75,000 to nonprofit groups at the Central Market and Tenderloin neighborhoods. They provided 26 tutors to the Tenderloin Tech Lab and contributed over 33 hours to the Bar Association’s eviction and homeless programs.
[Source: SF Gate]