SF Business Tax

Yesterday there was a meeting with about 50 business leaders in SF with the Mayor, Treasurer, City Attorney, Supervisor Chiu ,Ben Rosenfield and Ted Egan regarding changes in the SF business tax and fees. The City Attorney has indicated he wants to have initial language May1 for legislation he will draft to put on the ballot in November. Once he has drafted language it will go to the Board of Supervisors for their vote.


In the meeting there were many divergent views but it seems pretty clear at this point the payroll tax will be changed to s gross receipts tax. It will affect thousands of small businesses who are currently paying $25 and increase the business registration to $150. For those businesses with $100000 of gross receipts and over they will now have to pay a gross receipts tax.

Most small businesses that are currently paying the payroll tax will see their taxes reduced but there are notable exceptions.

The larger companies in the room expressed concerns however with the gross receipts rates. Especially hard hit are the headquartered companies like Mc Kasson , the GAP and the Shorenstein Company. Also hit hard are property owners with BOMA saying it would more than double many of their members cost. Property managers and financial institution will also see an increases.

The technology representatives and representatives of the retail ,manufacturing and restaurant industry supported the gross receipts tax but I think it is fair to say that everyone wants a tax that is fair to all. Steve Sarver of SF Soup Company eloquently pointed out that while the gross receipts tax will lower his cost he is also concerned that those businesses in the hardest hit areas may leave SF taking away potential customers from his business.

I am attaching the proposal and ask you focus on the gross receipts proposal.

I would like to hear from all of you but am particularly interested in those of you that will see your registration fee go up and those that will have to pay the new gross receipts tax. I would like to get your thoughts about increasing the registration fee to $250.

Scott Hauge


President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2188