SAN FRANCISCO (Reuters) - San Francisco officials have tentatively approved a 10-year exemption to the city’s 1.5 percent payroll tax for biotechnology companies that set up operations in the city, a city supervisor said on Wednesday.
The city’s board of supervisors late on Tuesday voted 7-4 to back the tax exemption, designed to lure start-up biotech companies to the city, which has failed to capitalize on the industry’s growth, Supervisor Michela Alioto-Pier said.
The University of California, San Francisco medical research school has spun off some 70 biotech companies and not one has established itself in San Francisco, said Alioto-Pier, who proposed the exemption.
Cities around San Francisco have waived payroll taxes on biotech companies, a reason some 850 such firms are located throughout the San Francisco Bay area, Alioto-Pier said.
“The problem San Francisco is faced with is that we’re the only city with a payroll tax for biotech companies,” Alioto-Pier said. “We were out of the market.”
“What we’re really looking to do is to generate a new industry for San Francisco,” she told Reuters. “Genentech is not going to relocate to San Francisco because we’ve got rid of the payroll tax, but some of the small biotech businesses will.”
Genentech Inc., the world’s second-largest biotech company, is headquartered in South San Francisco, a small town neighboring San Francisco.
Alioto-Pier said she expected San Francisco’s board of supervisors to give its final approval to the tax exemption at its meeting next week.
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