Tech groups win poll victory on tax San Francisco's tech industry enjoyed a victory when voters passed a law to reform the city's corporate tax law. Now companies will pay business taxes based on their sales, instead of the number of employees on their payroll. The new law is a boon for the growing number of internet start-up companies based in the area, like Twitter and Pinterest, who have been hiring engineers and designers in droves, but generate little to no revenues. Ron Conway, a prominent angel investor, spearheaded the campaign for the reform, with the backing of 350 technology companies that have their headquarters in San Francisco. He said the new law would encourage job creation. "Companies that are hiring fast get penalised because they have to pay a payroll tax on all the new hires," he told the Financial Times. But when they do get revenues, they'll pay the gross receipts tax and become a contributor to the system. Though local politicians had been drafting reforms with other high employee-count businesses in mind, like restaurants, they became vigorous cheerleaders for the change, and another provision that included employee stock options in the calculation of payroll tax, after Twitter and other tech companies threatened to leave the city in part because of the payroll tax. Politicians told Twitter in private conversations that they would repeal those taxes, but needed to put a measure before voters to change the law for the city because other industries will pay more taxes as a result of the change. Financial service companies, real estate agencies and law firms, which generate high revenues with relatively smaller employee rolls, will pay higher taxes as a result of the change. Politicians defended that, saying those sectors had enjoyed the benefits of the previous tax system and it was now time for them to "pay their fair share." There was no formal opposition to the measure. The tech industry waged an online campaign to generate popular support for the reform among San Franciscans. They created a video that starred Jack Dorsey and Biz Stone, co-founders of Twitter, and Brian Chesky, chief executive of Airbnb, offering technological solutions to common urban complaints like parking and slow public transit. What about a visual display installed in every single bus stop across San Francisco that shows you real time data of every cab, every train, every bus, every boat that's available to you right now so you can get that ride? Mr Stone says. The video ended with a call to vote yes on the tax reform measure on Tuesday.