Twitter May Get Tax Break for Giving Away Promoted Tweets
Technology Editor, CNBC.com
Twitter, along with other tech companies in San Francisco, may receive local tax breaks for agreeing to give "charitable contributions" that in Twitter's case includes giving away promoted tweets to local organizations and volunteering.
According to documents from San Francisco's government website, the tax deal—which requires companies with over $1 million in payroll expenses to negotiate a Community Benefits Agreement with the city— exempts approved companies located in the North of Market/Tenderloin Community in the city from the local 1.5 percent payroll tax on employees that are hired once the company moves into the neighborhood.
As first reported on Buzzfeed, tech companies including Twitter, Microsoft-owned Yammer and ZenDesk have agreed in their contracts to a list of requirements that include things like supporting local businesses, supporting workforce development and establishing local nonprofit grants programs.
Twitter did not immediately respond to a request for comment regarding how much the company expects to save because of the tax breaks, but the company did reveal some details in its contract about how much it plans to spend to be exempt from the payroll tax on new hires.
According to the contract, Twitter will offer $60,000 worth of credit in the form of promoted tweets—a form of advertisement on Twitter's platform— to nonprofits in the neighborhood and has committed to purchasing a minimum of $200,000 worth of goods and services from local businesses.
(Read More: BlackRock to Buy $80 Million Twitter Stake)
The social media company has also agreed to donate no less than $50,000 worth of computers and other IT equipment to local schools and nonprofits, offer pro bono legal assistance neighborhood residents and participate in other local volunteer programs.
(Hat tip: Buzzfeed)