San Francisco Wants to Tax Your Stock Options– All of Them.
February 18, 2011 at 03:07 AM EST
Few people are aware the San Francisco has had a tax provision in its municipal code since 2004 that requires companies to pay a payroll tax on gains from employee stock options. No one pays it, and San Francisco hasn't enforced it to date, but companies are becoming increasingly agitated that the city may change that policy at any time. The number of high profile and high value startups based in San Francisco - like Twitter and Zynga - may be too big of a temptation for the city to ignore. Recently, I heard San Francisco Mayor Ed Lee on our local NPR station talking about how important it was to keep Twitter's headquarters in San Francisco. To those worried that the recent talks between Twitter and the City were stalling, his words must have been reassuring. Unfortunately, there's that much bigger tax time-bomb ticking away at City Hall that Lee needs to defuse now. It's not just about keeping Twitter in San Francisco-- this could have ramifications for San Francisco's entire startup ecosystem.