First Year Free is a program passed by the Board of Supervisors and the Mayor to support and revive San Francisco small businesses as the City recovers from the pandemic. The program waives the cost of initial registration fees, initial license fees, first-year permit, and other applicable fees for qualifying businesses. There is no extra paperwork to apply – enrollment is automatic when you register as a new business or new location with the City.
In November 2022, the Board of Supervisors extended the program through June 30, 2023, increased the gross receipts threshold to qualify, and expanded the type of businesses that qualify. The eligibility changes include:
- Increasing the maximum gross receipts for a business to qualify for the tax and fee waiver from $2m to $5m; and
- Removing the requirement that the business must be located on the ground floor.
Businesses that are retroactively eligible (i.e. they started on or after November 1, 2021 and meet the newly expanded criteria) should check back soon for more information about how to request refunds.
By the Numbers
To qualify for First Year Free, you must be a new business, or new location of a business, that begins between November 1, 2021 and June 30, 2023 and:
- Have $5,000,000 or less in estimated (or reported) San Francisco gross receipts; and
- Have a registered location that is for commercial use.
Permit applications and related fees submitted prior to registering a business or new location of a business do not qualify for the First Year Free program.
- Initial year business registration fee (for new businesses only)
- Application, inspection and one-time permit fees
- Initial license fees
Participating City & County Departments, including the Department of Building Inspection, the Department of Public Health, the Department of Public Works, the Entertainment Commission, the Fire Department, the Planning Department, the Police Department and the Public Utilities Commission will be able to confirm a business or location’s eligibility, and will not charge a business for any fees that are waived as part of First Year Free.
Starting November 1, 2021, when a new business registers or adds a new location with the Office of the Treasurer & Tax Collector, these forms will request information and determine eligibility for the First Year Free program. Businesses that qualify will have the opportunity to enroll immediately and will receive an email and letter confirming their enrollment. Bring this email or letter to permitting agencies and first-year application fees, permit fees and license fees will be waived on the spot.
Some First Year Free businesses may now also qualify for expedited review of construction and operation permits under Proposition H and the Small Business Recovery Act and may be entitled to receive permits from required departments within 30 days. Learn more here or in person at the Permit Center located at 49 South Van Ness Avenue.
I started my business before November 1. Am I eligible?
Unfortunately not. The Board of Supervisors designed this program with explicit deadlines built in. Because it is a pilot program, it is only available for new businesses that commenced business or existing businesses with new locations that began between November 1, 2021 and June 30, 2023.
What is commercial use?
"Commercial use" is any non-residential use businesses.
I have delinquencies. Am I eligible?
If you are an existing business with a new location that otherwise qualifies (gross receipts under $5M and location is commercial use), then you are eligible for the program if you clear up the delinquencies.
Why do I still have to pay for one location?
If you are a new business, First Year Free and its fee waivers applies only to your location(s) that meet the program’s requirements. So for example, if you are opening a new business location that is eligible and have a headquarters in an office building that is not (because it was registered before November 1, 2021) any fees associated with permits and licenses for the new location will be waived, but you will still need to pay fees associated with the headquarters.
Why do I still have to pay state fees?
First Year Free only waives fees that are charged by and owe to the City and County of San Francisco. In some instances, for example police fingerprinting fee or DPH’s hazardous materials fee, the City collects a state surcharge for the fee. While the City will waive the cost of the City fee, the applicant will still be required to pay the state portion of the fee to the relevant department.
I just got a bill for licenses but it is still my first year. Why?
First Year Free only waives the initial first year license fees, not the fees for your entire first year. Depending on when you started your business and your renewal cycle, you may have to pay for your next year’s fee during your first year of business. For example, the Unified License bill goes out in February and is due by March 31 for the following year’s license. If you started a business in November, your initial year (November through March 31) is waived, but you will owe the license fee for the next year (April 1, 2022 through March 31, 2023).
Eligibility for First Year Free is determined using information a business provides during the new business registration process or account update process. If any of this information changes or is incorrect, eligibility may be impacted.
First Year Free approvals will be reviewed for compliance with the law. If our office determines that your location or business is not new, or does not meet the criteria for First Year Free, we will send an invoice for the amounts waived through the program. Additionally, if the qualifying new business or an existing business with a qualifying new location has more than $15,000,000 in San Francisco gross receipts for the calendar year that business commenced in San Francisco, or the three calendar years following, this business will need to pay the amounts waived (first-year permits, initial licenses and initial business registration fees).
The First Year Free Report outlines the impact of the program through February 28th, 2022.
Need Further Assistance?
Visit our Help Center to submit a question. Questions submitted before 7:00 pm will receive a response on the SAME DAY. Questions submitted after 7:00 pm will receive a response by the next business day.