The approval of Proposition M by San Francisco voters marks an important step forward in restructuring our business tax system. I want to thank the community for your engagement and input during the reform process. As we move into implementation, I am committed to keeping you updated on our progress and providing several opportunities for your feedback.
Here is a high-level timeline and brief update on key initiatives related to reform:
Summer / Fall, 2024 - The Office of the Treasurer & Tax Collector (TTX) held a series of Interested Parties meetings about Sourcing, Voluntary Disclosure and Advance Written Determination program development.
December, 2024 – TTX will post a comprehensive website about Prop M and begin to offer regular presentations and outreach sessions.
January 1, 2025 – Prop M becomes effective.
February, 2025 – TTX anticipates releasing draft Sourcing regulations and scheduling a Tax Collector Hearing, which will be an opportunity to receive community input.
February 28, 2025 – 2024 Annual Business Tax filing deadline under the existing, pre-Prop M rules and rates.
Spring, 2025 – 30 days after ordinance approval, TTX will begin accepting applications for Advance Written Determinations and Voluntary Disclosure Agreements. See below for details.
March 31, 2025 – Regulatory license fees due as usual with no Prop M-related waivers.
April 30, 2025 – 2024 Annual Business Tax extension deadline under old rules. Estimated quarterly payments will continue to be due on April 30, July 31, and October 31, 2025.
June 2, 2025 – Business Registration Renewal deadline with new Prop M rates for a nine-month transition period.
March 2, 2026 – First joint Annual Business Tax filing and Business Registration Renewal deadlines under Prop M rules and rates. To receive an extension, businesses must submit a request by the deadline; pay 110% of previous year’s obligations for each applicable business tax type plus a Business Registration Fee calculated by applying the current year’s rates to 100% of the previous year’s San Francisco Gross Receipts or Payroll Expense, as applicable; and file their return by the extended deadline.
March 31, 2026 – Approximately $10 million in certain permit, license, and other fees will be waived for businesses and individuals. See below for details.
November 30, 2026 – New Annual Business Tax extension deadline to align San Francisco more closely with the California deadlines.
Waiving Certain Permit, License, and Other Fees
An ordinance was recently approved by the Board of Supervisors that will provide approximately $10 million in relief for businesses by waiving 49 regulatory permit, license, and other fees. The fee relief will particularly benefit the restaurant and nightlife sectors. The waivers will take effect in 2026. View ordinance and summary.
Voluntary Disclosure Agreements (VDA)
My office recently introduced a VDA program ordinance, which will authorize the Tax Collector to waive certain taxes, penalties, and/or interest when taxpayers voluntarily disclose and pay unpaid back taxes and interest for the previous six years in exchange for a waiver of penalties, and a waiver of taxes, penalties, and interest for tax periods prior to that lookback period. This program will go into effect 30 days after approval of the ordinance, which we anticipate being Spring, 2025. View ordinance and summary.
Advance Written Determinations (AWD)
Proposition M included a requirement that TTX establish an AWD program that allows taxpayers to obtain advance determinations regarding their tax liability or other tax issues. We reviewed and received input on a program proposal earlier this year and anticipate beginning to accept applications in Spring, 2025. The VDA program ordinance also contains authorization for our office to charge a fee for an AWD ($250 for applications filed on or before December 31, 2025). View ordinanceand summary.
Sourcing Rules
TTX staff held a series of Interested Party meetings earlier this year to share our initial thoughts and gather input on Sourcing rules from the business community. We have carefully reviewed the feedback gathered from these meetings, along with written comments, and are currently drafting Sourcing regulations set to be released in February, 2025. Following their release, a formal regulatory process will begin, providing ample opportunities for public input.
To support the business community in understanding Proposition M, my office will soon launch a website offering a comprehensive overview of the measure. Additionally, we are available to present to industry groups and address any questions you may have. To schedule a briefing, or if you have any questions or concerns, please reach out to Amanda Fried at amanda.fried@sfgov.org.
Thank you for your continued support and collaboration.
José Cisneros
Treasurer
City & County of San Francisco