GRT Tax Proposal Comparison

sf.citi member companies,

I hope you are doing well this evening.

I’m writing to you today to provide you with a brief comparison and overview of both GRT measures introduced by the Board of Supervisors and Mayor for the November ballot. Please see below for additional information that pertains to where both proposals are the same and where they differ. Please note, we have attached both proposals below.

Similarities

In both the Mayor’s GRT proposal as well as the Board of Supervisors’ GRT proposal, you will find the following key similarities:

1. Reducing the annual Business Registration Fee for businesses with $1,000,000 or less in San Francisco gross receipts
2. Increasing the small business exemption ceiling for the Gross Receipts Tax to $1,500,000 and increase the annual Business Registration Fee on businesses benefiting from this increased exemption ceiling
3. Repealing the Payroll Expense Tax

Differences

Below, you will find a list of key differences between both the Mayor’s GRT proposal as well as the Board of Supervisors’ GRT proposal. Please note, we have included a table below which directs you to the appropriate pages in order to find accurate tax rates per industry according to each proposal. References to the Mayor’s proposal are referring to the attached document titled “Mayor GRT Proposal” and references to the Board of Supervisors’ proposal are referring to the attached document titled “Board GRT Proposal”.

Length of Taxpayer GRT increases

• Mayor: Increase the Gross Receipts Tax on certain taxpayers for 15 years if a court strikes down the Homelessness Gross Receipts Tax Ordinance.
• Board of Supervisors: increase the Gross Receipts Tax on certain taxpayers for 10 years if a court strikes down the Homelessness Gross Receipts Tax Ordinance.

Length of Commercial Space GRT Increases

• Mayor: Impose a new general tax on the gross receipts from the lease of certain commercial space for 15 years if a court strikes down the Early Care and Education Commercial Rents Tax Ordinance.
• Board of Supervisors:  Impose a new general tax on the gross receipts from the lease of certain commercial space for 10 years if a court strikes down the Early Care and Education Commercial Rents Tax Ordinance.

Tax on Administrative Office Business Activities

• Mayor: The Administrative Office Tax Rate, measured by its total payroll expense that is attributable to the City, will be 1.4 percent.
• Board of Supervisors: The Administrative Office Tax Rate, measured by its total payroll expense that is attributable to the City, will be 1.4 percent for tax years beginning on or after January 1, 2014 and ending on or before December 31, 2020. For tax years beginning on or after January 1, 2021, it will be 1.68 percent.

Please note, for tax years beginning on or after January 1, 2018 and ending on or before December 31, 2020, the tax rates for both the Board of Supervisors’ proposal and the Mayor’s proposal reflect the same rates. However, for tax years beginning on or after January 1, 2021, the rates differ. We have provided more information below in order to make it easier for your companies to view the rate differences between both proposals.

As you know, we will be joining City Controller Ben Rosenfield for a discussion on business taxes this Friday for the November 2020 ballot. Please let us know if you have any questions in the meantime and we will be sure to provide you with an update on what transpires.

Thank you for your continued membership.

Jen

Attachments:

• Mayor GRT Proposal
• BOS GRT Proposal