Business

Enterprise tax reform deliberate for San Francisco’s November poll


Officials project that the recommended changes would be revenue-neutral as a whole, but would lead to some types of businesses paying more and others paying less.

Under the proposal, the 100 largest companies in San Francisco would go from paying 65% to 63% of the city’s total business taxes, while the remaining 10,800 businesses would go from paying 35% to 37% of that portion. 

Financial technology companies, for example, are projected to pay 81% less in business taxes, while biotech companies are expected to pay 68% more than they had previously.

A group of business interest groups, including the Golden Gate Restaurant Association, San Francisco Chamber of Commerce and Bay Area Council, put out a statement expressing general support for efforts to reform the city’s business tax code but saying they oppose any changes that raise taxes on any category of company.

“We strongly support reforming San Francisco’s business tax structure. However, we are unable to support a reform that does not improve our City’s overall economy. Now is the worst possible time to raise taxes on any San Francisco businesses,” the organizations said in a statement. 

Another key recommendation is meant to make it more difficult to enact new taxes by increasing the signature threshold to bring a tax measure to voters and limiting the ability for the mayor or a minority of four of the Board of Supervisors to directly place a tax proposal on the ballot. This recommendation would require a change to the city’s charter.

As a point of comparison, Oakland requires the signatures of 10% of the city’s registered voters to place a citizen-initiated tax measure on the ballot. In San Francisco, the number is 2%. 

“There’s a lot of things about the tax system now that adds a lot of uncertainty and concern, but don’t necessarily make the city any revenue,” Egan said. “We don’t want to discourage businesses from expanding or locating, staying in San Francisco just because the way taxes are set up.”

Around 85% of small businesses are currently exempt from Gross Receipts Taxes because they fall under $2.19 million in sales. Officials are recommending that this threshold be raised to $2.5 million and rise with inflation. 

The officials are also recommending the elimination of regulatory license fees charged by city departments like the Department of Public Health, the fire department and the Entertainment Commission. The roughly $10 million in lost revenue is expected to be offset by rate increases in the Gross Receipts Tax.



Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button