‘Excessive Greed’
Big Tech Billionaires Demand Tax Refunds From the City While SF Bleeds Red Ink
Have the Bay Area’s biggest tech companies no shame?
Local labor and political leaders rally in front of the San Francisco Superior Court on Tuesday, April 22. The demonstration was organized by the Public Employee Committee to protest recent lawsuits against the City by various tech companies.
Apparently, the answer to that question is a resounding yes — they have none whatsoever.
That’s because at a time when San Francisco faces severe financial challenges in the form of an $800 million budget deficit, a handful of multibillion-dollar corporations have decided to sue the City for refunds on back taxes.
Those companies want money back that they’ve already paid fair-and-square. And they want it now. A report recently published by the Public Employee Committee (PEC), which represents tens of thousands of SF city workers, lays out the nitty-gritty of the take-back titans.
According to the PEC report, the likes of Airbnb, Uber, and Lyft, among others, have disputed their tax payments to the City since 2019. The companies are primarily contesting how much of their total gross receipts should have been taxed in San Francisco.
Vacation rental company Airbnb is suing for $120 million in back taxes it claims it overpaid. Rideshare app Lyft’s number is north of $100 million, and fellow rideshare app Uber’s is in the $100 million ballpark.
In response, San Francisco has held more than $415 million in reserve to manage litigation should the City lose any or all of these lawsuits. That equates to half of the City’s estimated $817 million deficit.
The PEC comprises 15 of San Francisco’s building trades unions, plus the International Federation of Professional and Technical Engineers (IFPTE) Local 21, the Service Employees International Union (SEIU) Local 1021, and other local unions representing roughly 25,000 municipal workers who do everything from accounting to civil engineering to nursing and beyond.
SF Building and Construction Trades Council Secretary–Treasurer Rudy Gonzalez is one of three co-chairs of the PEC, along with IFPTE Local 21 Executive Director Debra Grabelle and SEIU Local 1021 Executive Director David Canham. Gonzalez is outraged by the tech companies’ actions.
“I think that anybody who claims to love this city and support this city should not kick it in its teeth when it’s down,” he said. “I’d like to see everybody lock arms to protect San Francisco, rather than allow it to be exploited when it’s vulnerable. And that’s what I believe some of these tech companies are out to do because I think that at their core, they care more about their profit margins than they do about the health of the City and the public services that our citizens have come to rely on.”
Enter Measure M, a November ballot proposition designed to reform San Francisco’s business tax and provide tax cuts to some of the biggest corporations. The likes of Google, Airbnb, and Uber helped fund the Yes on M campaign. The SF Building Trades endorsed the measure and other labor entities remained neutral. The proposition passed.
Still, Airbnb again filed suit for back taxes.
Gonzalez said that the trades’ support for Measure M was based on stabilizing the tax base and establishing a truce with the litigious tech companies. He called the companies still suing following the proposition’s passage “two-faced.”
“We didn’t see the most recent lawsuit coming,” Gonzalez said. “It felt like a betrayal of the political compromise that was reached.”
Sarah Perez is vice-president of IFPTE Local 21 and a city employee. She’s been heavily involved in the PEC’s push against tech companies’ tax stance, which she characterized as “excessive greed.”
“I think it’s simple,” Perez said. “They just need to pay their fair share in taxes. They were given tax breaks, and they’re now not wanting to pay their fair share.”
When big corporations don’t pay their taxes, she said, the burden falls on the everyday San Franciscan. That could lead to a negative impact on the City’s public services.
What of San Francisco Mayor Daniel Lurie, who talked up his relationships with big business on the campaign trail?
“The mayor is going to have to make some tough decisions around the City’s budget and funding programs,” Gonzalez said. “But there are a lot of programs in the City that are getting cut, and people are going to feel the effects. There’s a lot that can be done with $400 million.”
Perez said that the tech companies’ lawsuits could set a dangerous precedent, and she invites the mayor to join the PEC in seeking accountability.
“I hope that the mayor will join us in calling out Airbnb and demanding that they pay their fair share of taxes and drop the lawsuits,” Perez said. “Companies should all pay their fair share, and it’s never okay to not pay their taxes. Everybody has to pay taxes.”
Uber and Lyft did not respond to requests for comment. For their part, Airbnb provided Organized Labor with the following statement: “We’re committed to ensuring San Francisco remains a great place to live and work, and we’re proud to have stood alongside other companies and organizations in supporting reforms to the City’s business tax structure that are critical to helping businesses of all sizes thrive in San Francisco and advancing the City’s post-pandemic recovery.
“While we can’t comment on active litigation, Airbnb complies with its tax obligations.”
Watch this space for more reporting on the matter as it evolves.
Images From the Public Employee Committee Rally
Photography by Jana Ašenbrennerová
