Annual Business Tax Return Instructions (2019)

Small Business Enterprise Exemption Threshold Increases

The small business tax exemption threshold for the Payroll Expense Tax is $320,000 of taxable payroll expense. Likewise, the Gross Receipts Tax small business exemption threshold is $1,170,000 of combined gross receipts within the City. The Homelessness Gross Receipts Tax is applied to San Francisco taxable gross receipts above $50,000,000. The small business exemption threshold for the Commercial Rents Tax is $1,170,000 in combined San Francisco gross receipts from all business activities (not just receipts from the lease of commercial space).

In addition, if you fall below the small business exemption, you no longer need to file a Return unless you are claiming the Biotechnology Exclusion in Code section 906.1, the Clean Technology Business Exclusion in Code section 906.2, the Enterprise Zone Tax Credit in section 906A, the Central Market Street and Tenderloin Area Payroll Expense Tax Exclusion in Code section 906.3, or the Central Market Street Limit in Code section 961.

Tax Rates

For 2019, the Gross Receipts Tax adjustment factor is 100% and the Payroll Expense Tax rate is 0.380% (0.00380) after adjustment by the Controller as mandated by law.

Commercial Rents Tax and Homelessness Gross Receipts Tax

The Commercial Rents Tax (June 2018 Proposition C) and Homelessness Gross Receipts Tax (November 2018 Proposition C) were effective January 1, 2019 and will be reported as part of this filing. The Commercial Rents Tax Return is required for all taxpayers that receive gross receipts from the lease of commercial space in San Francisco, including taxpayers that sublease commercial space, even if the taxpayers themselves do not traditionally consider themselves to be landlords. The Homelessness Gross Receipts Tax Return is required for taxpayers that meet the $50,000,000 San Francisco gross receipts threshold.

Tax Filing Menu

The Online Form will display a “Tax Filing Menu” page where you can choose to file all applicable taxes at the same time, or you can choose to file each tax independently during different sessions. You are responsible for determining which of these taxes you are required to file and pay and you will incur penalties if you fail to file or pay a required tax by the deadline.

If you are claiming a tax credit or exclusion, or if you are filing as a filer of a combined group, then the form will require you to file Gross Receipts Tax and Payroll Expense Tax jointly.

From the Tax Filing Menu, you can click “Proceed to Payment” to get to the business tax payment portal.  This button will not be available on this page until you have submitted at least one tax Return.  The Office of the Treasurer & Tax Collector’s online business tax payment portal allows you to pay online by e-check or credit card, or to print a payment coupon for mailing a payment. Note, if your account is paid in full, or if you have not yet submitted any Returns, you may not be able to access the Payment Portal from this page.  If you still wish to pay, you must pay by check or in person.

Payments are due on or before the last day of February of the year following the tax year, unless the Tax Collector has granted you an extension prior to the due date.  Online forms must be transmitted before midnight on March 2, 2020.  Payments must also be received or postmarked on or before March 2, 2020.  Failure to meet these deadlines will result in penalties, interest, and fees.

If a payment is not honored by a financial institution, for any reason, the tax payment is null and void and a $50 returned payment fee will be chargeds. 

Courtesy Calculation

Tax calculation details are displayed differently than in years past. Rather than show you each individual payment you made throughout the year, we are providing a courtesy calculation page for each tax you file. This page will show your principal, and the sum of the estimated payments made in prior quarters. If you are filing late, it will also calculate any late filing, late payment and interest calculations. The calculations displayed will NOT include recent payments, or payments made to other annual business tax types.

Small Business Enterprise Exemption Threshold Increases

The small business tax exemption threshold for the Payroll Expense Tax is $320,000 of taxable payroll expense. Likewise, the Gross Receipts Tax small business exemption threshold is $1,170,000 of combined gross receipts within the City. The Homelessness Gross Receipts Tax is applied to San Francisco taxable gross receipts above $50,000,000. The small business exemption threshold for the Commercial Rents Tax is $1,170,000 in combined San Francisco gross receipts from all business activities (not just receipts from the lease of commercial space).

Request for Refund / Apply Forward (AFO)

In the beginning of the form, you will be asked if you prefer we refund overpayments or apply excess funds to future obligations. TTX will review each account after you file and will process refunds or AFO based on your answer to this question. You do not need to take any action.

NOTE: If your business is closed, or if your 2019 Return results in zero tax due, you will not have the option of requesting to apply overpayments to future tax obligations.  In these scenarios, the overpayment will be reviewed for a refund. 

Subcontractor Exclusion (Construction)

If you are excluding payments made to subcontractors possessing a valid San Francisco business registration certificate, you will be prompted to upload a spreadsheet of line items for the exclusion. This replaces the need to enter each payment individually into the form.

Substantially Similar Tax Credit

If you are claiming a Substantially Similar Tax Credit you must file using the paper form.

If you are completely exempt from the Gross Receipts Tax, Payroll Expense Tax, Commercial Rents Tax, and Homelessness Gross Receipts Tax under Code sections 906, 954, 2105, and 2805 respectively (summarized below), you do not need to file a Return.  If you are exempt from only some of the taxes and not all, complete the required Returns. You do not need to file a Return for a tax to which you are exempt.

Code section 906 provides a detailed list of persons that are exempt from the Payroll Expense Tax.  Such persons include:

• An organization having a formally recognized exemption from income tax pursuant to sections 501(c), 501(d), or 401(a) of the Internal Revenue Code (the “IRC”), as qualified by sections 502, 503, and 504 of the IRC. However, organizations (other than organizations described under section 501(c)(3) of the IRC) directly engaged within the City in an unrelated trade or business within the meaning of section 513(a) of the IRC that have, from their own operations, unrelated business taxable income within the meaning of section 512(a)(1) of the IRC, do not qualify for this complete exemption.
• Skilled nursing facilities licensed under the provisions of Title 22, California Administrative Code, Division 5, Chapter 3.
• Banks and financial corporations exempt from local taxation under Article XIII, Section 27 of the California Constitution and Revenue and Taxation Code section 23182.
• Insurance companies exempt from local taxation under Article XIII, Section 28 of the California Constitution.
• Persons engaging in business as a for-hire motor carrier of property under Revenue and Taxation Code section 7233.
• Persons engaging in intercity transportation as a household goods carrier under Public Utilities Code section 5327.
• Charter-party carriers operating limousines that are neither domiciled nor maintain a business office with the City under Public Utilities Code section 5371.4.
• Any other person upon whom the City is prohibited under the Constitution or statute of the United States or under the Constitution or statute of the State of California from imposing the Payroll Expense Tax.

Code section 954 provides a detailed list of persons that are exempt from the Gross Receipts Tax.  Such persons include:

• An organization exempt from income taxation by Chapter 4 (commencing with section 23701) of Part 11 of Division 2 of the Revenue and Taxation Code, or Subchapter F (commencing with section 501) of Chapter 1 of Subtitle A of the IRC, as qualified by sections 502, 503, 504, and 508 of the IRC. However, organizations directly engaged within the City in an unrelated trade or business within the meaning of section 513(a) of the IRC that have, from their own operations, unrelated business taxable income within the meaning of section 512(a)(1) of the IRC, do not qualify for this complete exemption.
• Banks and financial corporations exempt from local taxation under Article XIII, Section 27 of the California Constitution and Revenue and Taxation Code section 23182.
• Insurance companies exempt from local taxation under Article XIII, Section 28 of the California Constitution.
• Persons engaging in business as a for-hire motor carrier of property under Revenue and Taxation Code section 7233.
• Persons engaging in intercity transportation as a household goods carrier under Public Utilities Code section 5327.
• Charter-party carriers operating limousines that are neither domiciled nor maintain a business office with the City under Public Utilities Code section 5371.4.
• Any other person upon whom the City is prohibited under the Constitution or laws of the United States or under the Constitution or laws of the State of California from imposing the Gross Receipts Tax.

Code sections 2105 and 2805 provide detailed lists of persons that are exempt from the Commercial Rents Tax and the Homelessness Gross Receipts Tax. Such persons include:

• An organization exempt from income taxation by Chapter 4 (commencing with section 23701) of Part 11 of Division 2 of the Revenue and Taxation Code, or Subchapter F (commencing with section 501) of Chapter 1 of Subtitle A of the IRC, as qualified by sections 502, 503, 504, and 508 of the IRC.
• Any other person upon whom the City is prohibited under the Constitution or laws of the United States or under the Constitution or laws of the State of California from imposing the Commercial Rents Tax or Homelessness Gross Receipts Tax, as applicable.

You may not file your Return online and must file a paper Return if one or more of the following is true:

• You plan to claim the Central Market Street and Tenderloin Area Payroll Expense Tax Exclusion with respect to your Payroll Expense Tax;
• You plan to take the Central Market Street Limit in Code section 961;
• You plan to take the Substantially Similar Tax Credit in Code section 9549(g);
• You are a lessor of residential estate claiming a tax credit, exclusion, or limit;
• You are a lessor of residential real estate filing for a building that has both rent-controlled and non-rent-controlled units;
• You are filing on behalf of a combined group where one related entity in the combined group is filing for a tax credit, exclusion, or limit (such as the Enterprise Zone Tax Credit) and 100% of the combined group's San Francisco gross receipts and payroll expense are NOT attributable to the filing entity filing for the tax credit, exclusion, or limit; or
• You are filing on behalf of a combined group where at least one of the related entities in the combined group was: only partially in the combined group or only was included in the combined group for part of the year; AND you are reporting payroll expense greater than zero but less than or equal to $320,000 for that entity; AND the entity’s payroll expense for portion of the entity or tax year you are filing for is not proportionally representative of the entire tax year.  Under this scenario the online Return may incorrectly apply the small business enterprise exemption.

To obtain a paper Return, submit an online request for service, or call 3-1-1 from within San Francisco or 415-701-2311 outside of San Francisco.

Lessors of residential real estate in San Francisco must file a Gross Receipts Tax Return for each building if they are not otherwise exempt under Code sections 906 and 954 unless they lease fewer than 4 units in that individual building.  Lessors must file a Payroll Expense Tax Return for each building unless their taxable payroll expense in the City attributable to that building, computed without regard to the small business tax exemption in Code section 905-A, is less than or equal to $320,000.

“Residential real estate” means real property where the primary use of or right to use the property is for dwelling, sleeping or lodging other than as part of the business activity of accommodations.

If you were engaged in business in San Francisco as a lessor of residential real estate (a residential landlord), each individual building in which you lease residential real estate units is treated as a separate person, with a separate Business Account Number.

Lessors of residential real estate in San Francisco must file a Return for each building in San Francisco under a separate Business Account Number to correctly report their tax liability. Lessors of residential real estate that engage in any business other than leasing residential real estate (e.g., leasing commercial real estate, retailing, etc.) must complete a Return under a separate Business Account Number for the portion of their business that is not leasing residential real estate.

Residential landlords that qualify for a credit, exclusion, or limit may not file online and must file a paper Return.  Obtain a paper Return by submitting an online request for service, or call 3-1-1 from within San Francisco or 415-701-2311 outside of San Francisco

All persons and their related entities (defined below) must file the Return on a combined basis, reflecting the gross receipts, payroll expense, and other tax attributes (e.g., credits and exclusions, payroll for apportionment, etc.) of all related entities.  For purposes of these instructions, the terms “you” and “your” will refer to the filer and any related entities of a combined group, unless otherwise noted.

For purposes of this Return, the term “combined group” refers to a taxpayer and all its related entities.  A person is a related entity to a taxpayer if: (1) that person and the taxpayer are permitted or required to have their income reflected on the same combined report for California Franchise or Income Tax purposes; or (2) that person and one or more other persons (including the taxpayer) derive gross receipts solely from sources within California and their business activities are such that, if conducted both within and outside California, a combined report would be required for California Franchise or Income Tax purposes. 

If an entity was a member of your combined group for only a portion of 2019, include that entity in your combined group’s Return for the portion of 2019 that it was a member.  For the portion of 2019 that the entity was not a part of your combined group, that entity will have to file separately or as part of another combined group. 

If you are currently a non-filing member of a combined group but were a separate entity for a portion of the year, you must file as a separate entity for that portion of 2019 that you were a separate entity engaged in business in San Francisco.

If your combined group for California Franchise or Income Tax purposes includes an entity that is exempt from the Payroll Expense Tax, Gross Receipts Tax, Commercial Rents Tax, and/or Homelessness Gross Receipts Tax (e.g., banks or financial corporations exempt from local taxation under Article XIII, Section 27 of the California Constitution and Revenue and Taxation Code section 23182), you should exclude the gross receipts, payroll expense, and other tax attributes of this exempt entity from your combined Return.

NOTE: Pursuant to Tax Collector Regulation 2014-2, a single-member entity (including a single-member limited liability company) treated as a disregarded entity for federal income tax purposes will be disregarded for purposes of the Gross Receipts Tax, Payroll Expense Tax, and business registration requirements.  This also applies to the Commercial Rents Tax and Homelessness Gross Receipts Tax.  Each such entity will be treated as a sole proprietorship, branch, or division of its owner.  The owner of the disregarded entity will be the registrant and taxpayer for purposes of the Gross Receipts Tax, Payroll Expense Tax, Commercial Rents Tax, Homelessness Gross Receipts Tax, and business registration requirements.

Tax Return Menu

On this page, you will see lines for the taxes available for you to file. 

If you are an Administrative Office Tax filer, you will see two lines: one for Administrative Office Tax and Homelessness Administrative Office Tax filings and one for Commercial Rents Tax.

If you are a Gross Receipts Tax and Payroll Expense Tax filer, you will see three lines: one for Gross Receipts Tax and Homelessness Gross Receipts Tax Returns, one for Payroll Expense Tax, and one for Commercial Rents Tax.

If you have not yet filed a tax, you will see a “File” button.  Click the “File” button to begin your Return.

If you have started, but not submitted, a Return for a tax, you will see a “Continue Filing” button.  Click this button to continue your Return.

If you have already submitted a Return for a tax, you will see an “Amend” button.  Click this button to amend a previously filed Return.  You will also see a “View Prior Submission” button.  Clicking this button will open an html of your most recently filed Return.

Payroll Expense Tax Return

If you are a filer for a combined group, you will see the Payroll Expense Tax – Related Entities page.  If you are claiming a tax credit or exclusion, you will see the Tax Credits and Exclusions selection page.

If you are neither a filer for a combined group nor claiming a Tax Credit and Exclusion, then you will see the Payroll Expense Tax Return page.

Payroll Expense Tax Return

Line 1 – San Francisco payroll expense

Enter your San Francisco payroll expense for 2019. Article 12-A of the Code provides detailed rules for determining San Francisco payroll expense.

Line 2 – San Francisco Payroll Expense Tax

The system will calculate your payroll expense tax (0.38% of your San Francisco payroll expense).

After you click submit, you will be taken to the Submission Confirmation page.  Click “Continue” on the Submission Confirmation page to go to the Courtesy Calculation page.  Click “Continue” on the Courtesy Calculation page to return to the Tax Filing Menu page.

Gross Receipts Tax Return - Identification of Business Activities

Check the box corresponding to each business activity in which you engaged in 2019, regardless of the amount of gross receipts that the business activity generated.  Most activities are categorized by their 2012 North American Industry Classification System (“NAICS”) code.  For more information on the 2012 NAICS codes, go to www.census.gov/eos/www/naics. The “Biotechnology” and “Clean Technology” businesses are described in Code sections 906.1 and 906.2, respectively.  If you are engaged in any business activities not listed on this page, check the box next to line 20, and describe the activity or activities in the field that appears.

Note: Interest earned on savings accounts and other passive investment receipts may be reported in your primary business activity and do not need to be listed as a separate business activity.  

Lessor of Residential Real Estate (Residential Landlord) Gross Receipts Tax Return

The Office of the Treasurer & Tax Collector has provided a “Lessor of Residential Real Estate (Residential Landlord)” filing option for Residential Landlords.

1.       Log in to the online filing and answer a few introductory questions about your business.

2.      Select “Yes” when the system asks if you are a lessor of residential real estate.

3.      When you click to “File” your Gross Receipts Tax Return, the system will automatically select “Real Estate and Rental and Leasing Services” as your business activity.

4.      Enter the number of units you leased out and your total gross receipts for 2019. Answer “Yes” or “No” to “Are your units rent-controlled?”

The system will automatically calculate your Gross Receipts Tax.  If you leased out fewer than four units in the building for which you are filing, you will qualify for the small business exemption and will owe no Gross Receipts Tax. If you lease units subject to rent control, you may enter those amounts to calculate the 50% exclusion of gross receipts.  

Note: you must enter a value in line 3 to proceed with the filing. This figure must include the gross receipts for all units, including rent controlled units.  

5.      Complete the taxpayer statement and submit your Return.  From the Submission Confirmation page, click Continue to reach the Courtesy Calculation page.  From this page, click Continue to return to the     Tax Filing Menu page.  Remember that you may also be required to file a Payroll Expense Tax Return, which you can do from the Tax Filing Menu page. 

Apportionment

If you selected only Accommodations and/or Real Estate and Rental and Leasing Services as your business activity or activities, you will not see this page.  If you selected any other business activities, and you derived gross receipts from both within and outside San Francisco, your San Francisco gross receipts will be determined, at least in part, by apportionment. To calculate your apportionment percentage, enter your total payroll and San Francisco payroll for 2019. 

Total Payroll

Total payroll is the total worldwide compensation paid by you and any related entities, unless you made a valid water’s edge election for California Franchise Tax purposes, in which case your total payroll is determined in accordance with that election.  If you have employees, “compensation” means wages, salaries, commissions and any other form of remuneration paid to those employees for services.  If you have no employees, compensation includes all taxable income for federal income tax purposes of your owners or proprietors who are individuals.  If you had no payroll during 2019, enter zero.

Total Payroll within San Francisco

San Francisco payroll is determined by apportioning total payroll under Code section 904 (the rules applicable for determining your taxable San Francisco payroll expense for Payroll Expense Tax purposes).  If you had no San Francisco payroll during 2019, enter zero.

Click Save & Continue to continue to the Calculation of Gross Receipts page.

Calculation of Gross Receipts

For each business activity selected, the system will walk you through the calculation of your taxable gross receipts.  If you are a combined group, provide this information on a water’s edge or worldwide basis, depending on the election you made that governs your California Franchise Tax Board filing for 2019.  To determine the gross receipts to include in the “Total within San Francisco” column, use the rules in Code section 956.1, including the gross receipts of all related entities, regardless of the entities’ individual connections to San Francisco.

You must complete both “Total within and outside San Francisco” and “Total within San Francisco” columns for each line. If the San Francisco gross receipts for a business activity are determined wholly by allocating receipts according to Code section 956.1, then only the “Total within San Francisco” column will be used to calculate your Gross Receipts.  Similarly, if the San Francisco gross receipts are determined wholly by apportioning based on payroll according to Code section 956.2, then only the “Total within and outside San Francisco” column be used for calculation. 

Gross Receipts Instructions

In general, “gross receipts” includes all amounts received or accrued from whatever source derived, including, but not limited to, amounts derived from sales, services, dealings in property, interest, rent, royalties, dividends, licensing fees, other fees, commissions, and distributed amounts from other business entities.  Gross receipts generally include, but are not limited to, all amounts that constitute gross income for federal income tax purposes.

In lines 1-9, enter your gross receipts for that business activity.  Enter amounts even if excludable as gross receipts under the Code, because exclusions will be considered in lines 10-17. 

In lines 10-17, enter any exclusions from your total gross receipts for that business activity as reported on lines 1-9.  Only enter amounts that you included in lines 1-9.

Clicking “Save & Continue” at the bottom of the page will bring you to a separate page for your next business activity.  Each of the business activities selected is listed across the top of the page.  Once you have completed a page for all business activities selected, the system will automatically calculate your Gross Receipts Tax.

Line 1 - Sales

Enter your gross receipts or sales for the business activity in 2019, except for amounts listed on lines 2 through 9.  Include gross receipts in the year that they are recognized as gross income for federal income tax reporting purposes.  Do not include as gross receipts cash discounts allowed or taken on sales, or cash and credit refunds made to customers for returned merchandise.

Line 2 - Rent received from real property

For the business activity selected, enter the sum of all rental receipts (i.e., rent payments to you), whether received in cash or otherwise, for the lease or rental of real property in 2019, including any payments for services that are part of the lease or rental.

Line 3 - Royalties received

For the business activity selected, enter all royalties received or accrued in 2019.

Line 4 - Interest, dividends, and Other Amounts from the Ownership or Sale of Financial Instruments

For the business activity selected, enter the sum of all interest, dividends, and other amounts received or accrued from the ownership or sale of financial instruments in 2019.  “Financial instruments” include:

1. Stocks or other similar written instruments evidencing a right to participate in the assets of any business;
2. Bonds or other evidence of indebtedness; and
3. Any other marketable securities. 

To the extent that any loss on the sale or exchange of financial instruments in 2019 reduces your gross income for federal income tax purposes in 2019, you can reduce your gross receipts from the sale or exchange of other financial instruments in 2019 by the amount of that loss, but in no event shall those receipts be less than zero.

Line 5 - Amounts distributed from business entities

For the business activity selected, enter the sum of all distributions from business entities received or accrued in 2019.

Line 6 - Licensing and related fees received

For the business activity selected, enter the sum of all licensing and related fees received or accrued in 2019.

Line 7 - Commissions

For the business activity selected, enter the sum of all commissions received or accrued in 2019. 

Line 8 - All Taxes and Other Government Imposed Fees

For the business activity selected, enter the sum of all taxes and governmentally imposed fees received or accrued in 2019.

Line 9 - Other Amounts

For the business activity selected, enter the sum of any other amounts received or accrued in 2019, but not included in lines 1-8, including, but not limited to, amounts that constitute gross income for federal income tax purposes.

Line A - Subtotal Gross Receipts

This line will sum lines 1 through 9 automatically.

Line 10 - Related Entities

For the business activity selected, enter all amounts received from or charged to any related entity (as defined in Code section 952.5) in 2019.

Line 11 - Investment receipts - Interest, Dividends, and other Amounts

For the business activity selected, enter the sum of all interest, dividends, and other amounts received from the ownership or sale of financial instruments and distributions from business entities in 2019, provided such items are directly derived exclusively from the investment of capital and not from the sale of property other than financial instruments or from the provision of services to any person.  “Financial instruments” include: (1) stocks or other similar written instruments evidencing a right to participate in the assets of any business; (2) bonds or other evidence of indebtedness; and (3) any other marketable securities.

Line 12 - Allocations of Income, Gain, and Distributions From an Investment In a Pass-through Entity

For the business activity selected, enter the sum of all allocations of income or gains, or distributions (including returns on capital) in 2019 from an entity treated as a pass-through entity for federal income tax purposes, provided such allocations or distributions are derived exclusively from your investment in such entity, and not from any other property sold to, or services provided to, such entity.

Line 13 - Distributed Share of Gross Receipts From a Pass-through Entity Subject to the Gross Receipts Tax

For the business activity selected, enter the sum of all gross receipts received in 2019 from a pass-through entity that is subject to the Gross Receipts Tax.

Line 14 - Receipts From the Sale of Real Property Subject to the Real Property Transfer Tax

For the business activity selected, enter the sum of all receipts received from the sale of real property in 2019 with respect to which the Real Property Transfer Tax imposed by Article 12-C of the Code has been paid to the City. Per Tax Collector Regulation 2016-1, a person may only exclude from gross receipts those receipts from the sale of real property where the Real Property Transfer Tax imposed by Article 12-C of the Code was paid with respect to that particular sale by December 31 of the tax year in which the gross receipts at issue would otherwise be subject to the Gross Receipts Tax in Article 12-A-1.

Line 15 - Excludable Taxes

For the business activity selected, enter the sum of all excludable taxes in 2019.  Taxes excluded from gross receipts include only:

• Taxes imposed on or with respect to retail sales;

• Taxes imposed upon a person for which that person is reimbursed by means of a separately stated charge to a purchaser, lessee, licensee or customer (see Tax Collector Regulation 2019-1); and
• Third-party taxes that a taxpayer collects from or on behalf of the taxpayer’s customers and remits to the appropriate governmental entity imposing such tax.

Line 16 - Other Amounts 

For the business activity selected, enter the sum of any other amounts excludable by law if included in lines 1-9 and not otherwise included in lines 10-15 or line 17.  Include only amounts excluded as gross receipts, and not any reductions from the Gross Receipts Tax because of any credits, as these will be considered after calculating your Gross Receipts Tax liability.

Line B - Subtotal Exclusions

The lines sums lines 10 through 16.

Line C - Total Gross Receipts Before Allocation/Apportionment

This line is the difference between lines A and B.  The “San Francisco” column is your gross receipts allocated according to Code section 956.1 (if applicable to this business activity).

Line D - Allocated/Apportioned Gross Receipts

This line applies the appropriate allocation and apportionment methodology to your gross receipts. 

For business activities that use 50% apportionment and 50% allocation, the calculation is: (1) Line C of your “Total” column multiplied by your apportionment percentage multiplied by 50% plus (2) Line C of your “San Francisco” column multiplied by 50%.

For business activities that use only apportionment, the calculation is: Line C of your “Total” column multiplied by your apportionment percentage.

For business activities that use only allocation, this line will equal line C of your “San Francisco” column.

Gross Receipts Instructions - Construction Subcontractor Exclusion

Line 17 – Payments Made to Subcontractors
Note: This line will only show in the “Construction” business activity page. 

Your San Francisco gross receipts for the business activity of construction may be reduced by amounts paid in 2019 to a subcontractor possessing a valid business registration certificate with the City and County of San Francisco during the tax year to the extent that those amounts were included in line C of the “San Francisco” column.  Do not subtract any other costs, including, without limitation, costs for materials, fees, equipment, or other services.  To claim the reduction for payments to subcontractors, you must maintain an itemized schedule of payments to subcontractors and information sufficient to enable the Tax Collector to verify that the subcontractor possessed a valid business registration certificate with the City.

Per Tax Collector Regulation 2016-2, after allocating and apportioning its gross receipts under Section 953.5(c), a construction contractor may reduce its San Francisco gross receipts for the business activity of construction by any amounts paid to a subcontractor for work performed with respect to property in the City if the subcontractor possesses a valid business registration certificate with the City during the tax year. No reduction is permitted for any other costs, such as materials, fees, equipment or other services, and the reduction may not reduce the construction contractor’s taxable gross receipts for the business activity of construction below $0. To support the reduction, the contractor must provide to the Tax Collector upon request an itemized schedule of payments to the subcontractors and information sufficient to enable the Tax Collector to verify that the subcontractors possessed valid business registration certificates with the City during the tax year.

If you are reducing your construction gross receipts by amounts paid to subcontractors, click the button labeled “Subcontractor Information” to access the Subcontractor Information pop up box. 

You will be prompted to either enter your payments in directly, or to download an Excel template.

Manual Entry

Column – BAN (Business Account Number)

Enter the Business Account Number (BAN) of the subcontractor.  BANs must be seven digits long.

Column – Location

Enter the project location.  Only include payments made to subcontractors for projects located within San Francisco.

Column – Amount

Enter the total payments made or recognized.

Spreadsheet Upload

To upload a spreadsheet instead of manual entry, click on “Download Template.”  An Excel spreadsheet template will download.  Open the downloaded document.

Column – Line #

The spreadsheet is pre-populated with “1” for line 1.   For additional entries, enter the line numbers sequentially.

Column – BAN (Business Account Number)

Enter the Business Account Number (BAN) of the subcontractor.  BANs must be seven digits long.  For BANs with fewer than 7 digits, add zero to the beginning of the number so that there are 7 digits.  For example, to enter BAN 133, you would enter “0000133."

Column – Location

Enter the project location.  Only include payments made to subcontractors for projects located within San Francisco.

Column – Amount

Enter the total payments made or recognized.

Once you have completed the Excel form, save it to your desktop and then select “Upload Subcontractor Information” and select the document from your desktop. Select “Save” to return to the Calculation of Gross Receipts page.

The system will populate the fields of the subcontractor payments pop up with the data from your upload.  If you entered an invalid BAN in the spreadsheet, the data from that line item will not be uploaded.  The form will show an error message indicating the line numbers that were not loaded due to invalid data.

The form will sum the payments entered in the “Payment Amount” column and display the result at the top of the pop-up box.  After the pop up box is closed, this number will also display in line 17 on Gross Receipts Page F for the Construction business activity.  This amount cannot exceed the amount from line C.

Line E – Allocated/Apportioned Gross Receipts for Construction After Subcontractor Exclusion
Note: This line will only show in the “Construction” business activity page. 

This line is the difference between line D and line 17. 

Calculation of San Francisco Gross Receipts and Gross Receipts Tax

Calculation of San Francisco Gross Receipts

This page summarizes your San Francisco gross receipts based on your entries on the prior pages.  You may click the blue bars above this table to edit your responses. 

Calculation of Gross Receipts Tax

This page applies the appropriate tax rate(s) to your San Francisco gross receipts.  If you or your combined group is engaged in multiple business activities, this page applies the rules specified in Code section 953.9.  These rules include:

• If more than 80% of your San Francisco gross receipts are derived from business activities in one tax rate category, then that tax rate category applies to all of your gross receipts derived from all business activities.

• The small business exemption provided in Section 954.1 applies only if the sum of your San Francisco gross receipts from all business activities does not exceed $1,170,000 in total.
• The progressive tax rates apply on an aggregate basis for businesses with multiple sets of activities.
• The applicable rate for each set of business activities is determined in numbered order of the Code sections describing each set of business activities; i.e., activities described in Code section 953.1 are determined first, Code section 953.2 second, and so on.
• The tax rate(s) applicable to any set of activities after the first shall be determined by adding together the San Francisco gross receipts for all previous sets of activities and applying the rate scale commencing with the next dollar.  For instance, if you are engaged in a Retail Trade and Food Services and you have $1 million of gross receipts from your Retail Trade, your Gross Receipts Tax attributable to Food Services is calculated starting with the second-tier tax rate for gross receipts from $1,000,001 to $2,500,000.
• Your Gross Receipts Tax liability is the sum of your liabilities for each set of business activities.

This page will summarize the gross receipts, tax rate, and Gross Receipts Tax attributable to each of your business activities, pursuant to the rules above.  Line F totals the Gross Receipts Tax before credits for all your business activities.

Homelessness Gross Receipts Tax Return

Persons and combined groups with more than $50,000,000 in combined taxable San Francisco gross receipts are required to file and pay the Homelessness Gross Receipts Tax.

Line 1 – San Francisco Gross Receipts

This number will be pulled from the Gross Receipts Tax filing.

Line 2 – Receipts Subject to the Commercial Rents Tax

Enter the total receipts subject to the Commercial Rents Tax. Amounts received that are subject to the Commercial Rents Tax are excluded from taxation under the Homelessness Gross Receipts Tax.

Line 3 – Gross Receipts subject to the Homelessness Gross Receipts Tax

This number will calculate Line 2 subtracted from Line 1.

Line 4 – Homelessness Gross Receipts Tax Calculation

This line calculates the Homelessness Gross Receipts Tax obligation, which is 0.175% to 0.69% on combined taxable gross receipts over $50 million.

Line 5 – Irrevocable gift amount

There is litigation pending about the validity of the Homelessness Gross Receipts Tax. Until the litigation is resolved, the revenues from the Homelessness Gross Receipts Tax cannot be expended by the City. In order to fund homeless services as outlined in the Homelessness Gross Receipts Tax as quickly as possible, the City passed an ordinance creating an opportunity for taxpayers to either waive their right to refund of the Homelessness Gross Receipts Tax based on the grounds of the pending litigation, or make an irrevocable gift to be used for the same purposes as the Homelessness Gross Receipts Tax.

If a taxpayer is willing to make an irrevocable gift to the City for the City to use for the same purposes as the Homelessness Gross Receipts Tax, the City will grant such taxpayer a credit against the Homelessness Gross Receipts Tax liability of the taxpayer or its combined group equal to 110% of their gift amount. Gifts must be submitted via check or wire, and be submitted with a form Irrevocable Gift: Homelessness Gross Receipts Tax found on https://sftreasurer.org/business/taxes-fees/homelessness-gross-receipts-tax-hgr. Any and all gifts are irrevocable.

Enter the amount of the irrevocable gift that you made here.  You must have submitted the irrevocable gift prior to the filing of this Return to take the credit for the gift on this Return.

Line 6 – Tax credit for irrevocable gift amount entered on Line 5

The system will calculate 110% of your gift amount and display it here.

Line 7 – Homelessness Gross Receipts Tax amount after gift credit

This line will calculate the Homelessness Gross Receipts Tax amount after the tax credit for irrevocable gift.

Line 8 – Homelessness Gross Receipts Tax waived refund amount

If you choose to waive your right to a refund based on the grounds of the pending litigation, the City will grant you a credit of 10% of the Homelessness Gross Receipts Tax refund waived. Funds will be spent for the purposes allowed under the Homelessness Gross Receipts Tax Ordinance passed by the voters as Proposition C in November 2018.

You or your combined group must enter into a binding agreement signed by the filer and each member of filer’s combined group (if applicable) each year between January 1 and the time of filing your annual tax Returns. This agreement is found here: https://sftreasurer.org/business/taxes-fees/homelessness-gross-receipts-tax-hgr under “Tax Credits” and “Waive Right to Refund”.  The agreement must be printed, completed, signed by the taxpayer and returned to this office, postmarked by the date the Returns are filed.  If approved, the agreement will be countersigned by the City and County of San Francisco, and a copy will be returned to the taxpayer. 

Enter the amount for which you are waiving your right to refund. You cannot enter an amount greater than Line 4.

Line 9 – Tax credit for waived refund amount entered on Line 8

The system will calculate 10% of your waived amount and apply it as a credit against your tax obligation. 

Line 10– Homelessness Gross Receipts Tax amount after credits

This line will calculate the total Homelessness Gross Receipts Tax amount after credits. 

After you click submit, you will be taken to the Submission Confirmation page.  Click “Continue” on the Submission Confirmation page to go to the Courtesy Calculation page.  Click “Continue” on the Courtesy Calculation page to return to the Tax Filing Menu page. (Line 7 – 9)

Administrative Office Tax and Homelessness Administrative Office Tax

If you click “File” or “Amend” for Administrative Office Tax, you will be taken to the Administrative Office Tax Return.

You will only see this option if you selected “yes” to questions 9, 10, 11 on the Filing Questionnaire.  

If you are a filer for a combined group and clicked YES to Question 7 on the Filing Questionnaire page, you will see the Administrative Office Tax – Related Entities page.  If you are a single filer, or clicked NO to Question 7, you will be taken directly to the Administrative Office Tax Return page.

Administrative Office Tax - Related Entities Statement Data

If you indicated you are the filer for a combined group, you will see this page, which allows you to enter the information to calculate your Administrative Office Tax liability for your combined group.  When you first enter the page, only the filer’s information will populate the fields on the screen.  You must enter the count of employees and San Francisco payroll expense for the filer before you can add related entities.

Adding Related Entities to the Combined Group

After you have entered the count of employees and the San Francisco payroll expense for the filer, you may add related entities.  To add a related entity to the combined group, select the “Add Member” button on the left side of the screen below the table.  This will start a new line, where you must enter the 7-digit Business Account Number of the related entity you wish to add to the combined group.  After you enter the Business Account Number, the Business Name will automatically populate.  Confirm that the Business Account Number and Business Name are correct before proceeding.  You may add as many related entities as you need to complete your combined group. 

Column – #
This is an auto-populated column that tracks the number of related entities in the combined group, including the person filing on behalf of the group. 

Column – Business Account Number
Enter the Business Account Number for the additional members in this field. To delete a member, click “X” to the left of the Business Account Number.

Column – Percent of Entity Included in Filing (100% if Wholly in Group)
In this column you may adjust the percentage that an entity is part of the combined group.  This situation may arise where a pass-through entity is only partially owned by and is unitary with an entity or entities in one or more combined groups.  Note, if the amount in this column is adjusted to less than 100%, the entity or someone filing on behalf of the combined group the remaining portion or portions of the entity is in, will have to complete a Return to account for the portion of the entity that is not included in this filing. 

Column – Date Entered Group
Enter the date the entity joined the combined group.  Entities filing separately that: (1) joined a combined group during the tax year and were engaged in business in San Francisco prior to that date (whether fully included in the combined group or not for the portion of the year that they were members); or (2) were partially included in a combined group for the entire tax year, should enter the date they first engaged in business in San Francisco.  Entities filing separately that left a combined group during the tax year and were engaged in business in San Francisco after leaving the group (whether fully included in the combined group or not for the portion of the year that they were members) should enter the date they left the combined group.  If the date was an uncertain date prior to January 1, 2014, it is acceptable to enter 1/1/2014.  If the date is after January 1, 2019 (1/1/2019) and the entity engaged in business in the City prior to the date it joined the combined group, the entity or someone filing on behalf of the combined group the entity is/was part of, will have to complete a Return to account for the portion of the year that the entity was not part of this combined group but was engaged in business in the City. 

Column – Date Exited Group (Leave Blank if Not Applicable)
Enter the date the entity exited the group (if the entity is still part of the combined group leave blank).  Entities filing separately that: (1) left a combined group during the tax year and were engaged in business in San Francisco after leaving the combined group (whether fully included in the combined group or not for the portion of the year that they were members); or (2) were partially included in a combined group for the entire tax year, should leave this blank if they are still engaged in business in San Francisco or should enter the date they ceased engaging in business in San Francisco.  Entities filing separately that joined a combined group during the tax year and were engaged in business in San Francisco prior to that date (whether fully included in the combined group or not for the portion of the tax year that they were members) should enter the date they joined the combined group.  If a date exited is prior to December 31, 2019 (12/31/2019) and the entity continued to engage in business in the City after the date it exited the combined group, the entity or someone filing on behalf of the combined group the entity is/was part of, will have to complete a Return to account for the portion of the year that the entity was not part of this combined group but was engaged in business in the City. 

Column – Percent of Tax Year in Group
This column will calculate the number of days in 2019 each entity was in the combined group for this Return based on entries in the columns titled “Date Entered Group” and “Date Exited Group,” and divide by the total days in the year to arrive at the proportion of the year each entity was in the group.  If the entity was in the group for the entire year, this column will display 100%.

Column – Count of Employees
Enter the number of San Francisco employees this entity had as of the last day of the tax year, or the last date it was included in this filing, whichever is applicable. 

Column – San Francisco Payroll Expense
Enter your San Francisco payroll expense for 2019. Article 12-A of the Code provides rules for determining San Francisco payroll expense.  This should include only the payroll expense for the portion of the entity and/or portion of the tax year that the entity was part of the combined group.

Column – San Francisco Administrative Office Tax
The online form will calculate the San Francisco Administrative Office Tax for each entity. 

Summary Table – Combined Group Employee Count, San Francisco Payroll Expense and San Francisco Administrative Office Tax Before Credits and Exclusions

The online form will sum all the count of employees entered, the San Francisco Payroll Expense of all entities, and the San Francisco Administrative Office Tax. 

Click Save & Continue to continue to the Administrative Office Tax Return page.

Administrative Office Tax Return

Line 1 – San Francisco payroll expense.

Enter your San Francisco payroll expense.  If you are filing as the filer of a combined group, this field will populate with the data from the Related Entities page.

Line 2 – Administrative Office Tax @ 1.4%

The system will calculate your Administrative Office Tax, which is 1.4% of your San Francisco payroll expense.

Homelessness Administrative Office Tax Return

All businesses that file Administrative Office Tax are required to file and pay the Homelessness Administrative Office Tax.

Line 1 – San Francisco payroll expense

This number will be pulled from the Administrative Office Tax filing.

Line 2 – Total Homelessness Administrative Office Tax

This line calculates the Homelessness Administrative Office Tax obligation, which is 1.5% of your San Francisco payroll expense.

Line 3 – Irrevocable gift amount

There is litigation pending about the validity of the Homelessness Gross Receipts Tax (including the Homelessness Administrative Office Tax). Until the litigation is resolved, the revenues from the Homelessness Gross Receipts Tax cannot be expended by the City. In order to fund homeless services as outlined in the Homelessness Gross Receipts Tax as quickly as possible, the City passed an ordinance creating an opportunity for taxpayers to either waive their right to refund of the Homelessness Gross Receipts Tax based on the grounds of the pending litigation, or make an irrevocable gift to be used for the same purposes as the Homelessness Gross Receipts Tax.

If a taxpayer is willing to make an irrevocable gift to the City for the City to use for the same purposes as the Homelessness Gross Receipts Tax, the City will grant such taxpayer a credit against the Homelessness Gross Receipts Tax (including the Homelessness Administrative Office Tax) liability of the taxpayer or its combined group equal to 110% of their gift amount. Gifts must be submitted via check or wire, and be submitted with a form Irrevocable Gift: Homelessness Gross Receipts Tax found on https://sftreasurer.org/business/taxes-fees/homelessness-gross-receipts-tax-hgr. Any and all gifts are irrevocable.

Enter the amount of the irrevocable gift that you made here.  You must have submitted the irrevocable gift prior to the filing of this Return to take the credit for the gift on this Return.

Line 4 – Tax credit for irrevocable gift amount entered on Line 3

The system will calculate 110% of your gift amount and display it here.

Line 5 – Homelessness Administrative Office Tax after gift credit

Line 2 minus Line 4

Line 6 – Homelessness Administrative Office Tax waived refund amount

If you choose to waive your right to a refund based on the grounds of the pending litigation, the City will grant you a credit of 10% of the Homelessness Gross Receipts Tax (including the Homelessness Administrative Office Tax) refund waived. Funds will be spent for the purposes allowed under the Homelessness Gross Receipts Tax Ordinance passed by the voters as Proposition C in November 2018.

You or your combined group must enter into a binding agreement signed by the filer and each member of filer’s combined group (if applicable) each year between January 1 and the time of filing your annual tax Returns. This agreement is found here: https://sftreasurer.org/business/taxes-fees/homelessness-gross-receipts-tax-hgr.

Enter the amount for which you are waiving your right to refund. You cannot enter an amount greater than Line 5.

Line 7 – Tax credit for waived refund amount entered on Line 6

The system will calculate 10% of your waived amount and apply it as a credit against your tax obligation. 

Line 8 – Homelessness Administrative Office Tax amount after credits

This line will calculate the total Homelessness Administrative Office Tax amount after credits.  (Line 5 – Line 7)

After you click submit, you will be taken to the Submission Confirmation page.  Click “Continue” on the Submission Confirmation page to go to the Courtesy Calculation page.  Click “Continue” on the Courtesy Calculation page to return to the Tax Filing Menu page.

Tax Credits & Exclusions Return

If you are claiming a tax credit or exclusion, you will be required to file both Payroll Expense and Gross Receipts Tax Returns.  Clicking File for either Payroll Expense Tax or Gross Receipts Tax will take you to the Tax Credits & Exclusions Selections page.

Tax Credits & Exclusions Selection

San Francisco offers tax credits and exclusions for taxpayers meeting specific requirements, as described below. This page is designed to allow taxpayers to file for their credits and exclusions. Check the credit(s) or exclusion(s) you wish to claim and select “Save & Continue” to enter your credit and exclusion information.  If you are not claiming a tax credit or exclusion, click the “Back” button at the bottom of the screen to return to the Tax Return Menu.  On the “Tax Return Menu” page, click the “Back” button at the bottom of the screen to return to the “Filing Questionnaire” page, and change your answer to Question 6 to No.

If you are claiming the Central Market Street and Tenderloin Area Payroll Expense Tax Exclusion and/or Central Market Street Limit, or if you are claiming the Substantially Similar Tax Credit, you may not file your Return online and must obtain a paper Return (if you have not already received one) by submitting an online request for service.

Biotechnology

The requirements for the Biotechnology Exclusion can be found in Code section 906.1.

Biotechnology Exclusion Worksheet

The Biotechnology Exclusion permits an exclusion from payroll expense for persons meeting the requirements of Code section 906.1, in an amount determined under that Code section.  The “Payroll Expense Tax Exclusion” Credit permits a credit against the Payroll Expense Tax and Gross Receipts Tax of the entity generating the Biotechnology Exclusion in an amount equal to the additional Payroll Expense Tax reduction to which the eligible person would have been entitled as a result of the Biotechnology Exclusion if the Payroll Expense Tax had remained in effect at 1.5 percent.  You must timely file your Return to take the credit and exclusion.

To file for the Biotechnology Exclusion and related “Payroll Expense Tax Exclusion” Credit, complete and submit this page.

Line 1

Input the amount of payroll expense to be excluded from the eligible person’s San Francisco payroll expense due to the Biotechnology Exclusion in Code section 906.1. 

This is the Payroll Expense Tax exclusion for the eligible person and will be input in your Payroll Expense Tax Statement.

Line 2

The system will multiply the amount in line 1 by 1.12% (0.0112). This product is your “Payroll Expense Tax Exclusion” Credit.  It will be apportioned between the Payroll Expense Tax and Gross Receipts Tax.

Click “Save & Continue” to proceed to the next page.    

Clean Technology

Many of the requirements for the Clean Technology Business Exclusion in Code section 906.2 are summarized by the San Francisco Department of the Environment.

Clean Technology Business Exclusion Worksheet

The Clean Technology Business Exclusion permits an exclusion from payroll expense for persons meeting the requirements of Code section 906.2, in an amount determined under that Code section.  The “Payroll Expense Tax Exclusion” Credit permits a credit against the Payroll Expense Tax and Gross Receipts Tax of the entity generating the Clean Technology Business Exclusion in an amount equal to the additional Payroll Expense Tax reduction to which the eligible person would have been entitled as a result of the Clean Technology Business Exclusion if the Payroll Expense Tax had remained in effect at 1.5 percent.  You must timely file your Return to take the credit and exclusion.

To file for the Clean Technology Business Exclusion and related “Payroll Expense Tax Exclusion” Credit, complete and submit this page.

Line 1

Input the amount of payroll expense to be excluded from the eligible person’s San Francisco payroll expense due to the Clean Technology Business Exclusion in Code section 906.2. 

This is the Payroll Expense Tax exclusion for the eligible person and will be input in your Payroll Expense Tax Statement.

Line 2

The system will multiply the amount in line 1 by 1.12% (0.0112). This product is your “Payroll Expense Tax Exclusion” Credit.  It will be apportioned between the Payroll Expense Tax and Gross Receipts Tax.

Click “Save & Continue” to proceed to the next page.    

Central Market Street

If you are filing for this exclusion and/or the Central Market Street Limit you may not file your Return online and must obtain a paper Return by submitting an online request for service, or calling 3-1-1 from within San Francisco or 415-701-2311 outside of San Francisco.

Enterprise Zone

The requirements of the Enterprise Zone Tax Credit can be found in Code section 906A.  Persons filing for this credit and the related “Payroll Expense Tax Exclusion” Credit must have received vouchers for their qualified employees on or before December 31, 2014. Businesses that are eligible for the Enterprise Zone Tax Credit must download and complete theEnterprise Zone Tax Credit Calculation Tablewith your Annual Return.  

Line 1 - Credit Amount

Enter the calculated amount into line 1 of this page. 

Upload

Select the “Upload” button to upload the spreadsheet used to calculate the tax credit.  Our office will use this document to validate the credit taken.

Enterprise Zone Credit Worksheet

The Enterprise Zone Tax Credit permits a credit against the Payroll Expense Tax for persons meeting the requirements of Code section 906A, in an amount determined under that Code section.  The “Payroll Expense Tax Exclusion” Credit permits a credit against the Payroll Expense Tax and Gross Receipts Tax of the entity generating the Enterprise Zone Tax Credit in an amount equal to the additional Payroll Expense Tax reduction to which the eligible person would have been entitled as a result of the Enterprise Zone Tax Credit if the Payroll Expense Tax had remained in effect at 1.5 percent.  However, the Enterprise Zone Tax Credit and related “Payroll Expense Tax Exclusion” Credit are not available for employees hired on or after January 1, 2014, or for employees hired before January 1, 2014, who were not vouchered on or before December 31, 2014.

Businesses that are eligible for the Enterprise Zone Tax Credit must download and complete theEnterprise Zone Tax Credit Calculation Table.  For each employee, you will need to populate the yellow highlighted fields: Employee First Name, Employee Last Name, Job Title, Date Hired, Date No Longer Employed (if applicable), Gross Payroll Expense and Ineligible Payroll Expense.  The spreadsheet will calculate the tax credit. Save your calculation table Excel document with your employee information and upload it to the Annual Return when prompted by the form.  

Clicking Save & Continue will take you to the Payroll Expense Tax Return page.

Payroll Expense Tax Return - Credits and Exclusions

Line 1 - San Francisco payroll expense

Enter your San Francisco payroll expense.

Line 2 - Exclusion (i.e. Biotechnology, Clean Technology)

The system will display the sum of the exclusion amount you entered.

Line 3 - Net San Francisco payroll expense

The system will calculate the net San Francisco payroll expense.  Line 1 – Line 2.

Line 4 - San Francisco Payroll Expense Tax before credits

The system will calculate your payroll expense tax before credits (0.38% of your Net San Francisco payroll expense).

Click Save & Continue to continue to the Gross Receipts Tax Return page.

Gross Receipts/Payroll Expense Tax Return - Combined Groups

If you indicated you are the filer for a combined group, and you are a Gross Receipts Tax/Payroll Expense Tax filer, then when you click “File” for Gross Receipts Tax or Payroll Expense Tax, you will be taken to a combined Return for Payroll Expense Tax and Gross Receipts Tax.  The first page of the combined group Return is the Payroll Expense Tax – Related Entities page.

Payroll Expense - Related Entities 

If you indicated you are the filer for a combined group, you will see this page, which allows you to enter the information to calculate your Payroll Expense Tax liability for your combined group.  When you first enter the page, only the filer’s information will populate the fields on the screen.  You must enter the count of employees and San Francisco payroll expense for the filer before you can add related entities.

Adding Related Entities to the Combined Group

After you have entered the count of employees and the San Francisco payroll expense for the filer, you may add related entities.  To add a related entity to the combined group, select the “Add Member” button on the left side of the screen below the table.  This will start a new line, where you must enter the 7-digit Business Account Number of the related entity you wish to add to the combined group.  After you enter the Business Account Number, the Business Name will automatically populate.  Confirm that the Business Account Number and Business Name are correct before proceeding.  You may add as many related entities as you need to complete your combined group. 

Column – #
This is an auto-populated column that tracks the number of related entities in the combined group, including the person filing on behalf of the group. 

Column – Business Account Number
Enter the Business Account Number for the additional members in this field. To delete a member, click “X” to the left of the Business Account Number.

Column – Business Name
This is an auto-populated column based on your entry into the Business Account Number field.

Column – Percent of Entity Included in Filing (100% if Wholly in Group)
In this column you may adjust the percentage that an entity is part of the combined group.  This situation may arise where a pass-through entity is only partially owned by and is unitary with an entity or entities in one or more combined groups.  Note, if the amount in this column is adjusted to less than 100%, the entity or someone filing on behalf of the combined group the remaining portion or portions of the entity is in, will have to complete a Return to account for the portion of the entity that is not included in this filing.  An example below illustrates this approach to filing. 

Column – Date Entered Group
Enter the date the entity joined the combined group.  Entities filing separately that: (1) joined a combined group during the tax year and were engaged in business in San Francisco prior to that date (whether fully included in the combined group or not for the portion of the year that they were members); or (2) were partially included in a combined group for the entire tax year, should enter the date they first engaged in business in San Francisco.  Entities filing separately that left a combined group during the tax year and were engaged in business in San Francisco after leaving the group (whether fully included in the combined group or not for the portion of the year that they were members) should enter the date they left the combined group.  If the date was an uncertain date prior to January 1, 2014, it is acceptable to enter 1/1/2014.  If the date is after January 1, 2019 (1/1/2019) and the entity engaged in business in the City prior to the date it joined the combined group, the entity or someone filing on behalf of the combined group the entity is/was part of, will have to complete a Return to account for the portion of the year that the entity was not part of this combined group but was engaged in business in the City. 

Column – Date Exited Group (Leave Blank if Not Applicable)
Enter the date the entity exited the group (if the entity is still part of the combined group leaveblank).  Entities filing separately that: (1) left a combined group during the tax year and were engaged in business in San Francisco after leaving the combined group (whether fully included in the combined group or not for the portion of the year that they were members); or (2) were partially included in a combined group for the entire tax year, should leave this blank if they are still engaged in business in San Francisco or should enter the date they ceased engaging in business in San Francisco.  Entities filing separately that joined a combined group during the tax year and were engaged in business in San Francisco prior to that date (whether fully included in the combined group or not for the portion of the tax year that they were members) should enter the date they joined the combined group.  If a date exited is prior to December 31, 2019 (12/31/2019) and the entity continued to engage in business in the City after the date it exited the combined group, the entity or someone filing on behalf of the combined group the entity is/was part of, will have to complete a Return to account for the portion of the year that the entity was not part of this combined group but was engaged in business in the City. 

Column – Percent of Tax Year in Group
This column will calculate the number of days in 2019 each entity was in the combined group for this Return based on entries in the columns titled “Date Entered Group” and “Date Exited Group,” and divide by the total days in the year to arrive at the proportion of the year each entity was in the group.  If the entity was in the group for the entire year, this column will display 100%.

Column – Adjusted Small Business Exemption
This column will multiply the entries in the column titled “Percent of Member in Group” and the result in the column titled “Percent of Tax Year in Group” by $320,000, the small business enterprise exemption threshold for the payroll expense tax for tax year 2019.  If the entity was wholly in the group for the entirety of the year, this column will display $320,000. If an entity’s payroll expense for portion of the entity or tax year you are filing for is not proportionally representative of the entire tax year, the online Return may incorrectly apply the small business enterprise exemption. 

Column – Count of Employees
Enter the number of San Francisco employees this entity had as of the last day of the tax year, or the last date it was included in this filing, whichever is applicable. 

Column – San Francisco Payroll Expense
Enter your San Francisco payroll expense for 2019. Article 12-A of the Code provides rules for determining San Francisco payroll expense.  This should include only the payroll expense for the portion of the entity and/or portion of the tax year that the entity was part of the combined group.

Column – San Francisco Payroll Expense Tax Before Credits and Exclusions
The online form will calculate the San Francisco Payroll Expense Tax for each entity, taking into account the small business enterprise exemption. If an entity’s payroll expense for portion of the entity or tax year you are filing for is not proportionally representative of the entire tax year, the online Return may incorrectly apply the small business enterprise exemption. 

Summary Table – Combined Group Employee Count, San Francisco Payroll Expense and San Francisco Payroll Expense Tax Before Credits and Exclusions
The online form will sum all the count of employees entered, the San Francisco Payroll Expense of all entities that exceed the small business enterprise exemption threshold, and the San Francisco Payroll Expense Tax before credits and exclusions.  If any of the taxpayers have applied to claim a credit or exclusion in the Return, the exclusion(s) will be applied on the Payroll Expense Tax Summary page, and the credits on the Obligation Summary page.   

Click Save & Continue to continue to the Payroll Expense Tax and Gross Receipts Tax Returns

Commercial Rents Tax Return

The ‘Early Care and Education Commercial Rents Tax Ordinance’ became operative on January 1, 2019. This tax generally applies to businesses leasing commercial space in the City and generally does not apply to businesses exempt from Gross Receipts Tax.

In addition to the existing Gross Receipts and Payroll Expense Taxes, this measure imposes a new gross receipts tax of:

• 1% on the amounts a business receives from the lease or sublease of warehouse space in the City;
• 3.5% on the amounts a business receives from the lease or sublease of other commercial spaces in the City.

Commercial space is any building or structure, or portion of a building or structure, that is not residential real estate, as defined in Code section 954.1. For the purposes of this tax, commercial space does not include any building or structure, or portion of a building or structure, that is used for:

• Industrial Use, as defined in Section 102 of the Planning Code
• Arts Activities, as defined in Section 102 of the Planning Code
• Retail Sales or Service Activities or Retail Sales or Service Establishments that are not Formula Retail uses as defined in Sections 303.1(b) and 303.1(c) of the Planning Code

If you have no commercial rents to report, or are reporting you are exempt from the Commercial Rents Tax, click the checkbox next to “I have no commercial rents to report/I am exempt from the Commercial Rents Tax.”  Note that this will delete any data that you have entered for the Commercial Rents Tax Return. Scroll down, click “Save & Continue” to get to the Commercial Rents Tax Summary page, where you can certify and submit your Return. 

Select Location

From the drop down box, select the address you are reporting receiving gross receipts.

The drop down box displays the registered business locations for the Business Account Number that is filing the Return.  In addition, if you are the filer of a combined group and you already submitted your Payroll Expense Tax/Gross Receipts Tax Returns or your Administrative Office Tax Return, the drop down box will display the registered business locations for the Business Account Numbers (BANs) you claimed as members on the Related Entities page of those Returns.

If you need to report amounts for a San Francisco location not available in the drop down box, select “Other” from the drop down box.  A text box will appear for you to enter the location address.  Tab out of the box after entering the location address and the remaining fields on the page will become available for data entry.

Leased Square Footage of building 

Enter the leased square footage of the building. If you are reporting sublease receipts, report only the amount you are subleasing in this building.

Nature of Interest

State the nature of your interest in this building. We have provided Owner, Property Manager, and Tenant as options.

Line 1 - All gross receipts

Enter all gross receipts from the lease or sublease of space at this location, including but not limited to reimbursements and other amounts received from tenants or subtenants pursuant to the terms of the lease or sublease.

Line 2 - Residential Real Estate

Enter all gross receipts included in line 1 from the lease of residential real estate, as defined in Section 954.1 of the Code. These amounts are not taxable under this tax.

Note, the lease of residential real estate is taxed as a separate person from all other receipts. If you are reporting residential real estate on this form you may need to correct your business registration separately from filing this Return.

Line 3 - Industrial Use

Enter all gross receipts included in line 1 that are from space at this location used for Industrial Use, as defined in Section 102 of the Planning Code. These amounts are not taxable under this tax.

Line 4 - Arts Activities

Enter all gross receipts included in line 1 that are from space at this location used for Arts Activities, as defined in Section 102 of the Planning Code. These amounts are not taxable under this tax.

Line 5 - Retail Not Formula Retail

Enter all gross receipts included in line 1 that are from space at this location used for Retail Sales or Services Activities or Retail Sales or Service Establishments, as defined in Section 303.1(c) of the Planning Code, that are not Formula Retail uses as defined in Section 303.1(b) of the Planning Code.

Line 6 - Exempt Tenants

Enter all gross receipts included in line 1 that are received from exempt tenants, including governments and certain non-profits. Exempt tenants are further discussed in Code section 2105.

Line 7 - Rent Subject to the Transient Occupancy Tax

Enter all gross receipts included in line 1 that are from rent subject to the Transient Occupancy Tax. Include in this line any rent that would be subject to the Transient Occupancy Tax, but for an exemption under Code section 506. For more information about the Transient Occupancy Tax and rent subject to that tax, see Article 7 of the Code.

Line 8 - Rent Subject to Parking Tax

Enter all gross receipts included in line A1 that are from rent subject to the Parking Tax. Include in this line rent that would be subject to the Parking Tax but for an exemption granted in Code section 606. For more information about the Parking Tax and rent subject to that tax, see Article 9 of the Code.

Line 9 - Total Non-Taxable Rents

The system will sum lines 2 through 8 and display the result here.  These are the receipts that are not taxable under the Commercial Rents Tax.

Line 10 - Taxable Commercial Space

The system will subtract line 9 from line 1 and display the result here.  These are the receipts from the lease of taxable Commercial Space.

Line 11 - Warehouse Space

Of the amount in line 10, enter all gross receipts that are from the lease of Warehouse Space, as defined in Section 2103(b) of the Code.

Line 12 - Warehouse Space Tax Calculation

This is the Commercial Rents Tax for receipts from the lease of Warehouse Space at this location, before credits.  (Line 11 x 1.00%)

Line 13 - Commercial Space Other Than Warehouse Space Tax Calculation

This is the Commercial Rents Tax for receipts from the lease of Commercial Space other than Warehouse Space at this location, before credits.  ((line 10 – line 11) x 3.5%)

Line 14 - Commercial Rents Tax for this location, before credits

This is your Commercial Rents Tax before credits for this location. (line 12 + line 13). 

Line 15 - Sum of all Commercial Rents Tax for all locations, before credits

This line will display the sum of Commercial Rents Tax for all locations entered.

Do you have additional locations for which to report Commercial Rent receipts?

If you have additional locations for which to report receipts from the lease of Commercial Space, click Yes and the system will allow you to select or enter another location to report.  If you do not have additional locations for which to report, click No.

After you enter the data for the first location, the location will populate a grid at the bottom of the page.  You can use the buttons to the right of the line items to delete or modify locations already reported.

When you have entered information for all applicable locations, you will be able to click Save & Continue to continue to the Commercial Rents Tax Return Summary page.

Commercial Rents Tax Return Summary

Line 1 – Sum of all Commercial Rents Tax for all locations, before credits

This line will display the sum of the Commercial Rents Tax, before credits, on all receipts from the lease of Commercial Space calculated for all locations entered on the previous page.

Line 2 – Tax credit (requires document upload)

The Code permits a credit against the Commercial Rents Tax if you lease or provide Commercial Space in a property in the City for a qualifying child care facility that operates for more than six months in a tax year.  The calculation and rules applicable to this credit are provided in Code Section 2106.1.  Enter the amount of the credit to which you are entitled to here.

If you enter an amount in this field, the system will require you to upload a document to support claiming the credit.  The system can only accept one uploaded document, so if you need to upload multiple documents, you will need to combine them into one document before uploading.

Line 3 – Total Commercial Rents Tax for all locations

The system will subtract line 2 from line 1 and display the result here.  This is the total Commercial Rents Tax for all locations after credits.

Courtesy Calculation Page (by tax type)

You will see a Courtesy Calculation Page for each tax you file. This page will show your principal tax amount and the sum of the estimated payments made in prior quarters. If you are filing late, it will also calculate any late filing, late payment and interest calculations. The calculations displayed will NOT include recent payments, or payments made to other annual business tax types.

Principal Tax Amount

This line displays the principal tax amount for the indicated tax type, based on your Return.

Timely Payments

This line displays the sum of payments made to the indicated tax type that were received on or before March 2, 2020.

Remaining Principal Due

This line displays the principal tax amount for the indicated tax type, less any Timely Payments reflected above.

Administrative Fee

This line will display $55 administrative fee for late Returns.

Late Filing Penalty

This line will display $100 late filing penalty for late Returns.

Late Payment Penalty

This line will display the estimated late payment penalty for this tax type.  Information regarding late payment penalties and interest can be found here.

Interest

This line will display the estimated interest calculation for this tax type.  Information regarding late payment penalties and interest can be found here.

Late Payments

This line will display the sum of payments received on or after March 3, 2020.

Remaining Amount Due

This line will display the estimated remaining amount due after payments, penalties, interest and fees are applied.  This amount is an estimate and does not include recent payments or payments made to other tax types.  A positive number reflects a balance due.  A negative number reflects an overpayment.  Our office will review overpayments for refunds or application to future obligations.

If you have overpaid your taxes but this page does not reflect an overpayment, you must file a request to apply the overpayment to a future obligation or a refund form and/or claim for refund form within the time period mandated by law or you will forfeit the amount of your overpayment. 

Community Challenge Grant

If you would like to designate a portion of your gross receipts or payroll expense tax liability to the Neighborhood Beautification and Graffiti Clean-up Fund (also known as the "Community Challenge Grant Program") you may:

1. Check the box at left to designate 4.2 percent (0.042) of your tax liability; or
2. Enter an amount in the box at right up to 4.2 percent of your total tax liability.

These designations will not increase your tax liability, but will designate a portion of the tax you pay to go to the Community Challenge Grant Program.

Taxpayer Statement

Enter the information requested at the bottom of the page and sign the form.  If you are an agent of the taxpayer authorized to sign this Return on the taxpayer’s behalf, you must have a validly executed Power of Attorney.  A Power of Attorney Declaration (Form POA-1), along with instructions as to how to use the form to grant an individual authority to file a Return on behalf of a taxpayer, is available on the website of the Treasurer and Tax Collector atwww.sftreasurer.orgby entering “POA-1” in the search bar.

By signing the form you are certifying under penalty of perjury that you are the taxpayer (including an officer, general partner, member manager, executor, trustee, fiduciary, or other individual with the authority to bind the taxpayer), or an agent of the taxpayer authorized to sign this Return on behalf of the taxpayer pursuant to a validly executed Power of Attorney, and that you have examined the Return and all accompanying schedules or worksheets and have determined that, to the best of your knowledge and belief, all of the information is true, correct, and compliant with all the requirements in the stated sections of the Code.  You are also acknowledging that you are providing information in response to a request for financial information pursuant to Code section 6.5-1, and that you are required by law to complete this Return in its entirety and that the Return is subject to audit.

View/Download Return

Click “View Prior Submission” to download the most recently submitted Return for a specific tax type. 

Payment Options

The Office of the Treasurer & Tax Collector’s online payment portal allows you to print a payment coupon for mailing a payment, or to make an online payment. Payments are due on or before the last day of February of the year following the tax year, unless the Tax Collector has granted you an extension prior to the due date. Online forms must be transmitted before midnight on March 2, 2020. Payments must also be received or postmarked on or before March 2, 2020. Failure to meet these deadlines will result in penalties, interest, and fees.

If a payment is not honored by a financial institution, for any reason, the tax payment is null and void and a $50 returned payment fee will be charged.

Choose Method of Payment

Once you select which obligations you wish to pay, you may select from the four options at the bottom of the page:

Cancel will take you to back to the login screen for the Payment Portal.

To Pay By Check:

Print Payment Stub will generate a payment coupon for you to mail in your payment or pay in person. Please note that if you select more than one tax or fee to pay, the payment coupon will appear as a table on the page and you will have to submit the entire page with your check so our office can allocate your payments correctly.

Submit only the payment stub with check payable to "San Francisco Tax Collector”, write the Business Account Number on your check.

Mail to: San Francisco Tax Collector, P.O. Box 7425, San Francisco, CA 94120-7425.

To Pay In Person at City Hall

Acceptable forms of payment: cash, check (personal, business, money order, cashier's check) and using the public access computers to pay by credit card, debit card, electronic check (eCheck) during business hours (Monday through Friday, excluding holidays, from 8:00 am to 5:00 pm) at:

Treasurer & Tax Collector's Office

City Hall, Room 140, 1 Dr. Carlton B. Goodlett Place, San Francisco, CA 94102

To Pay by Electronic Transfer (wire transfer through Federal Wire System or ACH), submit a service request for instructions. 
 

Online Bill Payment (Payment Portal)

Electronic payments with debit, credit or electronic check (eCheck) are processed through our service provider CityBase. Electronic Check will take you to our online payment partner CityBase to pay by electronic check. Please note that there is no convenience fee for this service.

Please read the information on the CityBase payment page about acceptable payment types and convenience fees associated with each. Be advised that CityBase confirmation only indicates a receipt of your payment information. It may take 5-10 business days for the payment to process and clear with your financial institution. See additional online payment instructions below.

On the Payment Options and Accessing Your Return page, click Payment Options to go to the Payment Portal, which will display your current obligations. For your information, Business Account Number, Business Name, and address on file are displayed at the top of the page.

Note that payment of displayed obligations may not constitute payment in full of all tax liabilities. This does not reflect any obligations referred to collections

If your business has filed taxes and fees in the past year, those obligations will display on the payment tab of this page in addition to your Gross Receipts Tax and/or Payroll Expense Tax obligation(s) for tax year 2019.

Due Tab

The first tab is “Due,” which displays all taxes and fees that have been filed, but not paid.

Select to Pay Column

You may click the button at the top of the list of obligations to “Select All” or “Unselect All” obligations. You may also check the box in each row of the column “Select to Pay” to select individual taxes/fees to pay.

Tax Type Column

This column provides a description of the tax or fee that has an obligation. Most businesses will just see “Gross Receipts” or “Payroll Expense” unless you have other obligations.

Tax Year / Period

This column provides the year and period for the tax or fee. For the annual return, the four digit tax year and the period “04” will be displayed as “2019/04” for each tax. Other taxes or fees may be displayed.

Name

This column displays your business name.

Street Address

This column displays the address we have on file.

Bill Number

This number is for internal use.

Amount Due

This column displays the amount due for each obligation.

Amount to Pay

The cells in this column are set by default to zero. Once you check the box on the left to select an obligation to pay, the amount to pay will display in this column. If you do not wish to pay this amount, you may edit the amount in this cell to an amount less than the amount due. This action will change the amount you pay by credit/debit or the amount on the payment coupon, depending on the payment option you choose. Note that penalties and interest will accrue on unpaid amounts remaining after deadlines until paid.  If you need further assistance, submit an online request for service, or call 3-1-1 from within San Francisco or 415-701-2311 outside of San Francisco.