Feeds

Facebook IPO to stuff $2.5bn in California tax coffers

Zuckerberg & Co. bail out Golden State

Mobile application security vulnerability report

California state budget analysts report that Facebook's impending IPO will bring the state a tax windfall of nearly $2.5bn.

"Facebook's possible IPO ... [is] likely to generate substantial capital gains and other income for a small number of Californians and, in so doing, generate additional state tax revenues over the next few years," concludes a recent report from the California Legislative Analyst's Office (LAO).

You know that you're an important US company when the state with by far the highest GDP in the country lists you as a line item in its projections for personal income tax:

Facebook's IPO impact on California's personal income tax revenues

The Facebook IPO – more influential to short-term state revenues than the Bush tax cuts (click to enlarge)

That ginormous chunk o'change will be delivered to the Golden State's taxmen thanks to newly minted Facebook millionaires and billionaires paying capital gains taxes when they exercise their stock options.

The LAO cautions against the uncertainties of the market, and notes that it's impossible to plan any Facebook windfall with any precision. That said, the report advises that "given that an IPO clearly would benefit state revenues, we believe it is appropriate for policymakers to incorporate this into their budgetary discussions."

Although the report's projections assume a $100bn market cap for Facebook at the IPO, the LAO's analyst, Mac Taylor, was clearly crossing his fingers as he typed the report.

"If the IPO results in a market capitalization of well over $100 billion and/or Facebook's stock price climbs significantly above its IPO level (particularly in the first 6 to 12 months after the IPO)," he writes, "the state revenue benefit could be $1 billion or more over the level we assume, spread across a few fiscal years."

Ah, Mark Zuckerberg, how does it feel to hold the fate of 38 million Californians in your 27-year-old hands? ®

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.