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Public Policy Newsletter Article

San Francisco Board of Supervisors Send Business Tax Increases to November Ballot

  • 2020-07-30T15:00:00.000+0000
  • Bay Area
  • Author: Melanie Cohn

Last week, San Francisco Mayor London Breed and the Board of Supervisors reached an agreement for a November ballot measure to increase business taxes to address the city’s $2 billion budget shortfall. The Board of Supervisors took a final vote to send the measure to the ballot on July 28th.

Restaurants, retail, manufacturing, arts, and hospitality will see no increases through 2024, while other industries will see increases phased in over time as the broader economy recovers. If the measure passes – it needs a simple majority vote – the biotech sector is set to experience increases in gross receipts tax of 5% in 2022, 10% in 2023, and 15% in 2024. The 2023 and 2024 increases would be delayed if total citywide business gross receipts do not recover to 90% and 95% of 2019 levels, respectively. The measure would also increase the small business exemption to $2 million.

One element of the measure would free up the roughly $300 million in business taxes that the city has collected but cannot spend pending the outcome of two court cases related to previous ballot measures. The city won both cases at the trial court level, but both have been appealed.

Biocom has provided ongoing input to the City Controller and Board of Supervisors throughout this truncated process to place a tax measure on the ballot. On July 27th, we convened a meeting with San Francisco Supervisor Matt Haney to share the impacts of business tax increases on life science companies in the city.