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With no sales tax, Google contributes little to city's bottom line

Original post made on Aug 13, 2013

Mountain View must realize that Google's prestige is not paying the bills. Google does not generate the tax revenue Mountain View needs to pay for basic city services.

Read the full story here Web Link posted Friday, August 9, 2013, 12:00 AM

Comments (4)

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Posted by Garrett
a resident of another community
on Aug 13, 2013 at 6:27 pm

Mountain View needs to have a stronger retail and businesses that provide a taxable good. Hotel rooms, furniture stores, clothing stores and etc. We aren't going to get taxable sales if we have food stores, drug stores or day to day non taxable stores.

Would be nice to get another car dealer, more dollars from visitors, how about building space for large business meetings. Hey this people spend money.

El Camino Real is full of strip malls, run down old store fronts, space that can be used for small business. A larger Target will help, Marshall Home Goods is wanting to build a store.

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Posted by Jessica
a resident of Rex Manor
on Aug 21, 2013 at 10:23 pm

"Mountain View must realize that Google's prestige is not paying the bills."

Prestige does not pay bills. Whether it is Google's or not.

"Google does not generate the tax revenue Mountain View needs to pay for basic city services."

Should we expect any _single_ company in the city to generate that tax revenue anyway?

"For cities, sales tax revenue is the main commercial real estate benefit, both from corporate sales and employee purchases made during the day."

That may be true (you could throw numbers, you should know Google geeks like data) but property tax (both residential and commercial) accounts for 30% of tax revenue while sales tax generates 18% (FY 2009-10). Personally I'd love to know how much sales tax Mountain View businesses generate during weekdays vs. week-ends, before and after Google.

"In 2003, Google moved in. Google's free food, onsite-everything (oil changes to chiropractic care), and bused-in employees is an excellent way to keep employees and their money sealed in the Googleplex bubble."

Have you been downtown recently?? I see so many people wearing Google t-shirts I doubt their money is 'sealed' in the Googleplex, and that's just counting those who have little fashion sense! Steins Beer Garden seems to be always packed.

I admit not much may come from Mountain View itself, but according to some article on (exactly a year ago), "Google said its local and sustainable program takes produce for its San Francisco Bay Area locations from within 150 miles of Google’s main campus in Mountain View, California, and its seafood from within 200 miles". I'd say it probably does more for the local economy than eating $5 footlongs everyday.

"Since 2003, Google has had an IPO and made billions. Google is now on a real-estate buying spree, expanding the Googleplex bubble. Other North Bayshore businesses' leases have been terminated and moved out."

You should be glad: more property tax revenue. Google buying real estate at peak prices is not a bad deal for the city, is it? Google employees buying real estate in Mountain View adds more revenue too. Let's say each MV house becomes $100k more expensive because of all these Google employees. That translates to $160 additional revenue for the city (city receives 16% of 1% levy, again from FY 2009-10). Since the city collects 1% of taxable sales, one would have to spend $16,000 to generate $160 revenue. If you want to look at sales tax revenues, focus on auto dealerships and big retailers, these are the ones the city should try to attract. Good thing people like BMWs.

"Google's success is more than Mountain View can afford. City staff has downsized and cut city services. [...]"

Google made several $1M donations to the local schools, offered to fund several city's bike projects (not sure what the status is), offers free Wi-Fi, donates laptops to schools, offers free Wi-Fi, etc. How much does your company (Amplafi, if Google is correct) donate?

Ok, I now realize I must have spent more time replying to you than you spent on writing the original piece. Obviously the city would collect more tax revenues if Google paid more sales tax, but as Seth and Amy would say: Really??

Prop 13 on the other hand...

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Posted by Google Cheats
a resident of another community
on Aug 22, 2013 at 12:22 am

Google may pay property taxes but they pack their buildings full to overflowing. They have had a serious impact on sales tax revenue for a decade. 2009 is not far enough back to go. Check the sales tax revenue back in 2000 or even earlier. Google has shoved that revenue stream out the window. It should at least be charging sales tax on the income-tax free lunches, dry cleaning services, latte's, car washing services, etc. This is just plain cheating.

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Posted by Jessica
a resident of Rex Manor
on Aug 22, 2013 at 12:49 am

I can't find much on the city website so I'll quote some articles from our beloved

February 25, 2000:
"This year, expected sales tax revenues will be almost 10 percent less then the budgeted $20 million. [...] For example, Locke says that Sun Microsystems and Hewlett-Packard, two companies from which Mountain View derives "substantial revenue," are now allocating the point-of-sale of some purchases to other locations. Thus, while use tax may be collected, it does not come to Mountain View."

March 2, 2001:
"After seeing nearly two years of declining sales tax revenue and formulating last year's budget to account for another year of losses, the city's 2000-2001 mid-year report projects $10.8 million of unexpected revenue to come into the city this fiscal year.
Approximately $4.8 million of this is sales tax revenue."

March 1, 2002: (Google ended 2001 with 284 employees)
"The sales tax revenue was especially hard-hit _ tumbling an estimated $7 million from the previous year [...] The sales tax nosedive was largely the result of "use tax," the money that city businesses _ largely computer and internet companies _ pay for equipment purchased from out-of-state vendors."

February 14, 2003: (Google ended 2002 with 682 employees)
"Empty buildings aren't just eyesores; they are a symbol of how the weak economy has hurt the city. No business means no revenue. The prediction for the city's sales tax revenue from electronics and industry for the 2002-2003 fiscal year is down 63 percent from the 2000-2001 fiscal year."

As far as claiming that Google has had a serious impact on sales revenue and "check the sales tax revenue back in 2000 or even earlier": Google had $86M revenue in 2001 (I think it's safe to say they made even less in 2000 or even earlier!), and income from operations was less than $11M (net income was less than $7M).

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