Overview:
Eliminates the Payroll Expense Tax (filed in 2022 for tax year 2021)
- Increases the Small Business Exemption ceiling to $2 million
Decreases the Business Registration Fee for most businesses with San Francisco gross receipts up to $1 million
Increases the Business Registration Fee for most businesses with San Francisco gross receipts of $1- $2 million. See more.
Modifies Gross Receipts Tax Rates. See 2021 rates.
Small Business Exemption:
Proposition F expands the small businesses exemption ceiling
Proposition F expands the small business exemption ceiling from $1.2 million to $2 million. For 2021, most businesses other than lessors of residential real estate that have San Francisco gross receipts of $2 million or less:
- Must renew their annual Business Registration
- Do NOT need to file their Annual Business Tax Return or pay Gross Receipts Tax
View illustration of how Proposition F impacts the small business exemption.
Temporary Gross Receipts Tax Rate Reductions for Certain Industries:
Certain industries hit hard by the coronavirus pandemic and related shutdowns may temporarily be subject to lower gross receipts tax rates than in 2020. Those industries include:
- Retail Trade;
- Certain Services;
- Manufacturing;
- Food Services;
- Accommodations;
- Arts, Entertainment and Recreation
Calculating Quarterly Payments:
Proposition F changes how quarterly payments are calculated
Quarterly estimated payments reflected in our system will be based on your 2020 Annual Business Tax Return filing and will be displayed in the payment portal. You may pay the lesser of:
- The amount displayed in the payment portal; or
- An amount equal to 25% of your Business Taxes due for 2021, which may be $0.
More detail on how to calculate your estimated payments.
Estimate Impact of Prop F on Taxes
This estimation tool is for small business estimation purposes only and is not a replacement for filing a return. Use the tool by selecting a business activity, gross receipts amount, and payroll expense amount and the tool will show sample estimated tax obligations for before and after the implementation of Proposition F.
Small Business Exemption & Payroll Impact*:
Tax and Fee Rates
Gross Receipts Tax rates vary depending on a business' gross receipts and business activity.
Business Activity | 0-$1m | $1-$2.5m | $2.5-$25m | $25m + |
Retail Trade; and Certain Services | 0.053% | 0.070% | 0.095% | 0.224% |
Manufacturing; and Food Services | 0.088% | 0.144% | 0.259% | 0.665% |
| Transportation and Warehousing; Bio-Technology; and Clean Technology | 0.175% | 0.287% | 0.518% | 0.665% |
Accommodations; and Arts Entertainment and Recreation | 0.210% | 0.228% | 0.288% | 0.560% |
Private Education and Health Services; Administrative and Support Services; and Miscellaneous Business Activities | 0.735% | 0.770% | 0.840% | 0.910% |
Construction | 0.420% | 0.490% | 0.560% | 0.630% |
Financial Services; Insurance; Information; and Professional, Scientific and Technical Services | 0.560% | 0.644% | 0.714% | 0.784% |
| Utilities | 0.420% | 0.455% | 0.455% | 0.560% |
| Wholesale Trade | 0.105% | 0.140% | 0.189% | 0.224% |
| 0-$1m | $1-$5m | $5-$25m | $25m + | |
| Real Estate and Rental and Leasing Services | 0.399% | 0.399% | 0.420% | 0.420% |
Business Registration Fees for new businesses are based on San Francisco gross receipts or payroll expense for the current calendar year, and the business activity types selected. Use Schedule B if your business consists solely of the business activities of Certain Services (e.g. Repair/Maintenance, Personal/Laundry, Civic Orgs), Retail Trade, and/or Wholesale Trade (described on page 1 of the Application). If your business does anything else, use Schedule A.
Business Registration Fees for the registration year beginning July 1, 2021 and ending June 30, 2022.
| 2020 San Francisco Gross Receipts | Schedule A | Schedule B | State Fee |
| $0 to $100,000 | $52 | $43 | $4 |
| $100,000.01 to $250,000 | $86 | $72 | $4 |
| $250,000.01 to $500,000 | $144 | $115 | $4 |
| $500,000.01 to $750,000 | $288 | $230 | $4 |
| $750,000.01 to $1,000,000 | $403 | $345 | $4 |
| $1,000,000.01 to $1,500,000 | $575 | $475 | $4 |
| $1,500,000.01 to $2,000,000 | $805 | $665 | $4 |
| $2,000,000.01 to $2,500,000 | $345 | $230 | $4 |
| $2,500,000.01 to $7,500,000 | $575 | $460 | $4 |
| $7,500,000.01 to $15,000,000 | $1,725 | $1,294 | $4 |
| $15,000,000.01 to $25,000,000 | $5,751 | $4,313 | $4 |
| $25,000,000.01 to $50,000,000 | $14,379 | $8,627 | $4 |
| $50,000,000.01 to $100,000,000 | $25,882 | $17,255 | $4 |
| $100,000,000.01 to $200,000,000 | $34,510 | $23,006 | $4 |
| $200,000,000.01 and over | $40,261 | $34,510 | $4 |
For businesses that qualify as Administrative Offices, the following Business Registration Fees apply for the registration year ending June 30.
2020 San Francisco Payroll Expense | 2021 AOT Rate | State Fee |
$0 to $2,500,000 | $17,255 | $4 |
$2,500,000.01 to $25,000,000 | $28,758 | $4 |
$25,000,000.01 or more | $40,261 | $4 |
Most businesses with San Francisco Gross Receipts up to $1m:
Registration Fee reduction (approximately 50%) depending on the business' Business Activities
Most Businesses with San Francisco Gross Receipts between $1-$1.5m:
Registration Fee increase of $230 or $245 depending on the business' Business Activities
Most Businesses with San Francisco Gross Receipts between $1.5-$2m:
Registration Fee increase of $435 or $460 depending on the business' Business Activities
* The gross receipts tax is generally progressive, with rates that increase by tiers, depending on the amount of gross receipts attributable to the City. This table shows the range of gross receipts tax rates from the lowest tier to the highest tier within each business activity.
** If the gross receipts threshold for the 2023 tax year is not met, the rates shown in the "Tax Year 2022" column will also apply to the 2023 tax year. If the gross receipts threshold for the 2024 tax year is not met, the rates shown in the "Tax Year 2023" column will also apply to the 2024 tax year (in addition to the 2023 tax year if the gross receipts threshold for the 2023 tax year was met). The gross receipts threshold for the 2023 tax year is met if total gross receipts attributable to the City for the 2021 tax year equals or exceeds 90% of the total gross receipts attributable to the City for the 2019 tax year. The gross receipts threshold for the 2024 tax year is met if total gross receipts attributable to the City for the 2022 tax year equals or exceeds 95% of the total gross receipts attributable to the City for the 2019 tax year. For the 2025 and subsequent tax years, the tax rates shown in the column "Tax Years 2024 & After" apply irrespective of whether either of the above gross receipts thresholds was met.
*** The gross receipts tax rate applicable to taxable gross receipts in excess of $25,000,000 for the business activities of real estate and rental and leasing services would have increased to 0.325% beginning in tax year 2021 if Proposition F had not passed.
Additional Information
Full text of Proposition F is available here.
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