Industry trends in San Fran

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Legal and Regulatory Challenges-San Francisco

The top legal and regulatory challenges firms are facing across industries in the San Francisco region include the expiration of the Twitter Tax Break, which requires firms to start paying a 1.5 % payroll tax. Additionally, the proposition C legislation requires big businesses to pay taxes for city homeless programs. Moreover, the validation of the Proposition G Parcel Tax that was approved by voters in the City is about to be approved by the court, which will raise the parcel taxes paid by property owners.

Top legal regulatory challenges for companies in the San Francisco region

1. Expiration of the Twitter Tax Break
  • The legislation was sponsored by supervisor Jane Kim in 2011 to keep companies and jobs in San Francisco and revitalize the area after the recession.
  • The Central Market Tax Exclusion deal was brokered by the late Mayor Ed Lee, which granted companies with more than $250,000 in payroll who moved into the mid-market buildings a temporary exemption to the city’s 1.5% payroll tax, and will expire on May 20.
  • When the legislation expires, companies located in mid-market like Twitter, Uber, Zendesk, Airbnb, and Square and technology firms will be required to pay the city’s payroll taxes under the legislation.
2. Proposition C legislation
  • In November 2018, the citizens of San Francisco voted for Proposition C, which is meant to raise millions of dollars by taxing big businesses more in order to fund city homeless programs.
  • Two business interest groups from California and an anti-tax organization have joined together to oppose the San Francisco Proposition C legislation.
  • Passing a new tax measure in San Fransisco usually requires a two-thirds majority. However, this was changed by the attorney’s office stating that the "proposed tax measures put on the ballot by citizens — and not government officials — required only a simple majority to pass."
  • This legislation will affect all big businesses and firms including technology firms, health tech firms, energy, and environment space firms.
3. Doubling the pace of bike lane production and stepping-up the citation enforcement
  • The mayor is bringing more bike lanes to San Francisco. Mayor Breed has tasked San Francisco’s transit agency to build 20 miles of protected bike lanes in the next two years.
  • This is meant to deal with distracted motorists, hasty Uber and Lyft drivers, and traffic-snarled roadways that pose a threat to pedestrians and bicyclists in San Francisco.
  • The mayor has also asked the city agencies to increase citations of bike lane-blocking drivers by 10%.
  • This means more tickets for drivers who get into green lanes, a problem known to be caused by Uber and Lyft drivers trying to pick up passengers, and people delivering goods.
  • This legislation will affect Uber, Lyft and delivering companies as it will increase expenditure and also inconvenience drivers who will not have anywhere to stop to pick up passengers and offload goods.

4. Validation of the Proposition G Parcel Tax
  • The office of the Attorney for San Francisco City filed a preemptive lawsuit to ask the court to validate the passing of Proposition G.
  • This is an annual parcel tax set to increase the salaries of San Francisco educators in the next two decades.
  • The tax was put on the ballot in 2018 through a voter signature drive and authorizes the San Fransisco city to collect $298 in parcel tax from property owners in order to fund a 7 percent wage increase for San Francisco Unified School District educators.
  • The tax vote passed with a majority of 60.76 percent.

5. New use for San Francisco garages in upscale apartments


Sources
Sources

Quotes
  • "If Supervisor Aaron Peskin’s proposal succeeds, it’ll be a progressive dream come true: Uber, Lyft, Chariot, and Twitter could all be putting more money into the city come November."
  • "At the Board of Supervisors meeting on Tuesday, Peskin introduced a dual proposal tackling transportation network companies revenue and repealing the Twitter tax break, or Central Market Tax Exclusion."
Quotes
  • "With the controversial “Twitter Tax Break” program that allowed Mid-Market businesses to skirt millions of dollars in payroll taxes nearing its sunset, the district’s supervisor on Tuesday called for a hearing on the incentive program, which he described as falling short of its goals."
  • "The Central Market Tax Exclusion deal, brokered by the late Mayor Ed Lee, granted companies with more than $250,000 in payroll moving into mid-Market buildings a temporary exemption to The City’s 1.5 percent payroll tax. The program is set to expire on May 20."
Quotes
  • "The controversial tax break boosted tech companies' presence in S.F., but isn't everlasting — it expires in May."
Quotes
  • "San Francisco voters Tuesday gave a solid thumbs-up to Proposition C, which is designed to inject the most money ever directed at city homeless programs by taxing big businesses to raise hundreds of millions of dollars."
Quotes
  • "San Francisco voters passed Proposition C by a wide margin Tuesday night, turning on a fountain of tax money to pay for expanded homelessness programs starting next year. But those programs are going to have to wait a while — possibly years."
  • "On Wednesday, Controller Ben Rosenfield sent a letter to Mayor London Breed and the Board of Supervisors indicating that the city won’t spend the hundreds of millions of dollars Prop. C would bring in annually until a prickly legal dispute is resolved. The tax money will be collected, but it will sit in reserve."
Quotes
  • "Two California business interest groups and an anti-tax organization have banded together to oppose San Francisco’s Proposition C, the November ballot measure that taxes the city’s biggest corporations to fund housing and homelessness services."
Quotes
  • "Distracted motorists, hasty Uber and Lyft drivers and traffic-snarled roadways pose threats to pedestrians and bicyclists in San Francisco, but so does a slow-moving bureaucracy that hobbles the city’s efforts to make street improvements, Mayor London Breed said Wednesday."
Quotes
  • "More bike lanes are coming to San Francisco, at “double” the pace of original plans. Breed is tasking The City’s transit agency to build out 20 miles of protected bike lanes in just two years."
  • "And in a boon to frustrated cyclists, Breed asked city agencies to increase citations of bike lane-blocking drivers by 10 percent. That means more tickets for drivers who swing into green lanes, a problem many have publicly said is caused by two types of drivers: Uber and Lyft drivers trying to pick up passengers, and those in trucks delivering goods at nearby businesses."
Quotes
  • "The San Francisco City Attorney’s office filed a preemptive lawsuit Friday asking the court to validate the passage of Proposition G, an annual parcel tax that is set to increase the salaries of San Francisco educators over the next two decades."
  • "Placed on the June ballot through a voter signature drive, Prop. G authorizes the city to collect a $298 parcel tax from property owners to fund a 7 percent wage increase for San Francisco Unified School District educators. It passed with a majority vote of 60.76 percent."