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Public Policy Newsletter Article

San Francisco Moves to Put Gross Receipts Tax Increase on November Ballot

  • 2020-05-21T15:00:00.000+0000
  • Bay Area
  • Author: Melanie Cohn

Facing an almost $2 billion budget shortfall partially due to the COVID-19 pandemic, the San Francisco Board of Supervisors is considering various options for an increase to gross receipts tax on the November ballot. The San Francisco Chamber convened its members on May 15th to discuss the various proposals that are being put forward for the ballot, which include three options: shifting the tax burden from small businesses to mid-size and large businesses, spending money that is being collected from two previous ballot measures but not spent due to outstanding legal issues, and a straight increase of gross receipts tax to businesses making over $10 million per year.

The way that gross receipts taxes are collected in San Francisco has been an issue for the life science community since the inception of the tax in 2012. Currently, taxes are collected on funds that companies receive from nonprofit foundations and partnership agreements, among other sources of pre-commercial revenue. These sources are not traditionally taxed in other jurisdictions and have a disproportionate impact on small and mid-size life science companies that are not yet profitable.

The timeline for ballot language to be presented to the Board of Supervisors is quick – Biocom and companies throughout the city will have a few weeks to formulate positions and responses on the various proposals. Biocom will continue to advocate for revisiting the definitions and categories of gross receipts tax in the city, as we have been doing since opening our Bay Area office. If you or your company has questions or concerns about a gross receipts tax measure in San Francisco, please contact Melanie Cohn.