The Gross Receipts Tax and Business Registration Fees Ordinance (2012 Proposition E) was approved by San Francisco voters on November 6, 2012. It does not apply to the 2013 tax year or prior years. The first taxpayer filings affected were the installment payments due April 30, 2014 and the Business Registration Fees due May 31, 2014. The changes to the Gross Receipts Tax and Payroll Expense Tax commenced January 1, 2014. The Office of Treasurer & Tax Collector will provide taxpayers with instructions about changed business registration fees and tax filings in 2014.
City voters have approved a business tax based on gross receipts. (Article 12-A-1 of the Business and Tax Regulations Code) Most businesses with gross receipts of not more than $1 million annually are exempt from the Gross Receipts Tax, but are required to pay a business registration fee. The Gross Receipts Tax rates vary depending on the type of business and annual gross receipts from business activity in the City. The City will phase in the Gross Receipts Tax, and reduce the Payroll Expense Tax, over a five-year period beginning in 2014.
Q. I run a business in San Francisco. How does the Gross Receipts Tax and Business Registration Fees Ordinance affect me?
A. If you own or manage a business in San Francisco, the way you calculate your business registration fees and taxes will change.
Q. Will the Treasurer’s Office be communicating new tax instructions for the Gross Receipts Tax?
A. Yes. Taxpayers should expect to see these instructions in late 2014.
Q. I hear businesses with no more than $1 million in gross receipts will not have to pay the Gross Receipts Tax. Is this true?
A. For most businesses, yes. The Gross Receipts Tax has a small business exemption for businesses with no more than $1 million in gross receipts. This exemption also applies to residential rental property owners with fewer than four units in a building. Most businesses operating in San Francisco will pay a business registration fee.