First Year Free

First Year Free is a program created 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. Learn more about the program. 

By the Numbers

7,405
Businesses Enrolled as of June 10, 2024

To qualify for First Year Free, you must be a new business, or new location of a business, that begins on or after July 1, 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; and
  • Not be a home-based business or a short-term rental. 

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 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.  

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.

Register a New Business                Add a New Location

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. 

What is commercial use?

"Commercial use" is any non-residential use businesses, other than home-based businesses and short term rentals.

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 regulatory licenses but it is still my first year. Why?

First Year Free only waives the initial first year regulatory 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 2022, your initial year (November through March 31, 2023) is waived, but you will owe the license fee for the next year (April 1, 2023 through March 31, 2024).

I was just instructed to renew and pay my business registration but it is still my first year. Why?

First Year Free only waives the initial business registration fee, which may not be the fee for your entire first year. Depending on when you started your business and your renewal cycle, you may have to pay a registration renewal fee during your first year of business. For example, the business registration renewal notices go out in April and renewal is due by May 31 for the following fiscal year’s business registration. If you started a business in November 2022, your initial registration (covering November through June 30, 2023) is waived, but you will owe the business registration renewal fee for the following year (July 1, 2023 through June 30, 2024).

 

    April 2024

    The Board of Supervisors extended and the Mayor approved the program through June 30, 2025. 

    July 2023

    The Board of Supervisors extended and the Mayor approved the program through to June 30, 2024. As part of this extension, home-based businesses and short-term residential rentals were removed from eligibility. All other eligibility rules remain the same. 

    November 2022

    The Board of Supervisors extended and the Mayor approved 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.  

    2022-23 First Year Free Report - outlines the impact of the program through April 30, 2023.

        November 2021

        The initial version of the program became effective in November 2021. To qualify for First Year Free, you had to be a new business, or new location of a business, that began between November 1, 2021 and October 1, 2022 and:

        • Have $2,000,000 or less in estimated (or reported) San Francisco gross receipts; and
        • Have a registered location that is for ground floor commercial use.

        Interim First Year Free Report - describes the implementation process and impact of the program through February 29, 2022. 

        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).

        Download flyers to post and print. Please share information about First Year Free with your networks and communities!

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