Jul 18, 2019

San Francisco's IPO tax won't be on the ballot until 2020

Dan Primack, author of Pro Rata

Illustration: Rebecca Zisser/Axios

San Francisco's IPO tax is dead! Long live San Francisco's IPO tax!

The backdrop: Voters were to be asked this November to approve a corporate tax increase on stock-based compensation from 0.38% to 1.5%. It would have been retroactive to May 7, just days before Uber went public.

Driving the news: On Wednesday, the measure was delayed for a year, primarily because it might as well have been written in crayon. For example, it wasn't clear if the "IPO tax" was exclusive to companies going public, or to all stock-based compensation.

But the really devilish detail might have been use of proceeds.

  • The original bill earmarked proceeds for affordable housing initiatives, with proponents arguing that newly minted tech millionaires exacerbate an already-acute problem.
  • This meant, per San Francisco rules, that it would have needed two-thirds of voter support to become law.
  • The revised/delayed bill will also allow proceeds to be used for general city purposes, thus lowering the passing threshold to a simple majority.

Expect to see final language within the next few weeks, and then on the 2020 ballot.

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