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New San Francisco Business Tax Laws

San Francisco voters have approved Propositions C & D in the November 2018 election.

What this means to businesses:

Prop C Impact: Additional business taxes to create a dedicated fund to support services for homeless people and prevent homelessness, including one tax of 0.175% to 0.69% on gross receipts over $50 million that a business receives in San Francisco, and another tax of 1.5% on certain administrative offices’ payroll expense in San Francisco, raising an estimated $250–300 million in combined tax revenues annually.

Prop D Impact: Two changes to the gross receipts tax. The media focused on Prop D as a cannabis tax but it applies to all industries as there are 2 components to Prop D.

New Law 1: SF will impose new cannabis business taxes beginning in 2021, at rates ranging from 1% to 5% on gross receipts of cannabis businesses in San Francisco, where the Board of Supervisors could decrease those rates, or increase them up to 7%; AND

New Law 2: SF will apply many of its business taxes to businesses without a physical presence in SF, with over $500,000 in gross receipts in San Francisco. This levels the playing field for out of city businesses who compete with SF businesses subject to SF taxes.

If you are enjoying my tax and finance tips and would like to buy me a beverage

Richard Pon CPA, CFP