Quarterly Installment: Gross Receipts Tax and Payroll Expense Tax
2016 Gross Receipts & Payroll Expense Tax
If you had no gross receipts tax AND payroll expense tax liability in 2015, you will not be assessed penalties or interest if you do not file this form or remit quarterly installments in 2016. If you had a gross receipts tax or payroll expense tax liability in 2015, you may pay 26% of your 2015 gross receipts tax and payroll expense tax liability for this quarterly installment. The online form will provide 26% of your 2015 tax liability for your information. However, if you wish to input another amount to reflect your actual tax liability for each quarter, you may do so during the respective filing periods only:
Quarter 1: Deadline April 30, 2016.
Quarter 2: Open July 1. Deadline is August 1.
Quarter 3: Open October 1. Deadline is October 31.
Frequently Asked Questions
As required by our Business and Tax Regulations Code, every person with taxable payroll expense in excess of $260,000 or taxable gross receipts in excess of $1,000,000 in a given tax year shall pay the payroll expense tax and gross receipts tax for that tax year in 4 quarterly installments. The first, second, and third quarterly installments shall be due and payable, and shall be delinquent if not paid on or before, April 30*, July 31*, and October 31, respectively, of that tax year. The fourth installment shall be reported and paid on or before the last day of February of the immediately following tax year.
Penalty and Interest Waiver. You may avoid penalties and interest by making installment payments that are 26% of your 2015 payroll expense tax liability and 26% of your 2015 gross receipts tax liability by the due dates indicated above. For example, if your 2015 payroll expense tax liability was $10,000, and your gross receipts tax liability was $1,000, a payment of $2,600 toward the payroll expense tax and a payment of $260 toward the gross receipts tax would not be penalized.
Further, if you did not pay the gross receipts tax and payroll expense tax last year because you fell under both of the small business exemptions, you will not be penalized if you make zero installment payments in 2016. You will still have to file and pay any gross receipts tax and/or payroll expense tax due in February 2017, unless you fall below the filing thresholds for those taxes.
Payroll Expense Tax Installments. A person's first, second, and third quarterly installment payments of payroll expense tax for the 2016 tax year shall be computed by using the person's taxable payroll expense (as defined under Article 12-A) for each quarter multiplied by 0.75% (0.0075).1
Gross Receipts Tax Installments. A person's first, second, and third quarterly installments of gross receipts tax for the 2016 tax year shall be computed by using the person's taxable gross receipts (as defined under Article 12-A-1) for each quarter and the rates applicable to the person's taxable gross receipts under Sections 953.1 through 953.7 of Article 12-A-1, multiplied by 50 percent.1 A worksheet is available to assist taxpayers in calculating their Gross Receipts Tax. Taxpayers subject to the administrative office tax portion of the gross receipts tax shall compute their tax installments by multiplying their taxable payroll expense (as defined in Section 953.8 of Article 12-A-1) by 1.4% or 0.014.
Gross Receipts of Less than $1 Million in a Given Quarter. If you will be subject to the gross receipts tax for tax year 2016 (because you will have over $1 million in annual San Francisco gross receipts, excluding rents from residential real estate), but have $1 million or less in gross receipts in a given quarter (excluding rents from residential real estate), then calculate your quarterly installment payment by multiplying your actual taxable gross receipts for the quarter by the applicable tax rate for receipts between $0 and $1 million. Alternately and requiring less filing effort, taxpayers should remember that that no installment penalties or interest will apply as long as the sum of your gross receipts tax installment payment and payroll expense tax installment payment for the quarter is at least 26 percent of the sum of your gross receipts tax liability and payroll expense tax liability for tax year 2015. The online form will provide your 26% of your 2015 tax liability for your information.
Lessors of residential real estate must make separate quarterly installment payments with respect to their rents from residential real estate for each individual building in which they lease 4 or more residential units, regardless of their annual San Francisco gross receipts. Lessors of residential real estate that earn gross receipts from business activities other than leasing residential real estate should follow the general rules for quarterly installment payments described above with respect to those gross receipts from other business activities.
Combined Groups of Related Entities must file and pay on a combined basis. Please note the online system is currently displaying the 2015 payroll expense tax filing for only the filer of the combined group, and not the members. Please file and pay based on the combined group's actual payroll expense for the subject quarter, or 26% of the entire group's tax liability for 2015.
Since July 31, 2016 falls on a Sunday, by law the deadline is extended to August 1, 2016.