Board OKs payroll‑expense tax exclusion for small businesses through 2015; 10–1 vote

The Board of Supervisors voted to adopt an ordinance amending the Business and Tax Regulations Code to permit a payroll expense tax exclusion for “net new payroll” at qualifying small businesses effective through 2015.

Why it matters: Supporters said the exclusion is designed to encourage hiring by small enterprises at a time when the city is shifting major revenue policies. The ordinance is intended as a temporary incentive tied to broader budget deliberations.

What leaders said: Supervisor John Farrell, who sponsored the item, framed the measure as a pragmatic step in the context of budget negotiations and small‑business support. Supervisor David Campos, a co‑sponsor, said the exemption is a way to make benefits comparable to prior tax breaks given to other taxpayers and to support minority‑ and women‑owned local businesses. Supervisor John Avalos said he would vote no and urged attention to rising fees on small businesses as an alternative way to help them.

Key provisions and conditions: The ordinance applies citywide and includes an eligibility condition that businesses under investigation for violations of San Francisco labor standards would not be eligible for the exclusion (a provision acknowledged and praised by Supervisor Kim and by labor groups that worked with the city to secure the language).

Vote: On the roll call the change passed 10–1. Supervisors present and recorded as voting yes included Wiener, Campos, Chiu, Cohen, Ellsberg, Farrell, Kim, Mar and Olague; one supervisor recorded a “no” vote.

Follow‑up: Staff and sponsors said the measure was incorporated into the larger budget package and would be subject to additional implementation steps handled through the Controller and the Treasurer’s offices.