San Francisco leaders seek 'significant' business tax reform

Technology mecca San Francisco is reassessing its business tax climate as it seeks to develop a more comprehensive system that provides for city needs without unfairly burdening businesses.

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San Francisco Mayor London Breed and the president of the Board of Supervisors, Norman Yee, sent a letter to city controller asking him to look into the business-tax structure, requesting recommendations to make it more comprehensive and efficient.

According to the letter, the city is seeking recommendations for a more efficient and stable tax system that encourages job creation, is fair to small business, identifies additional ways to generate revenue and addresses inequities in the current system. San Francisco is home to a number of large technology companies.

City leaders said the “significant tax policy” changes will impact the city for “decades to come.”

The aim to shake up the city’s business tax structure comes as the city battles a growing homelessness problem. There has been a 17 percent jump in the number of homeless residents over the past two years.

But leaders noted it is “critical” to understand how any “revenue generation through” tax measures will impact the city’s overall economic well-being.

Business taxes generate more than $1 billion for the city each year, according to the San Francisco Chronicle.

As reported by the Chronicle, San Francisco has recently implemented a number of taxes on businesses – including on ride-hailing services and another on companies with wide pay gaps – but there have been calls for a more uniform and comprehensive approach.

Spokespeople for Mayor Breed and Norman Yee did not return FOX Business’s request for comment.


In 2012, the city transitioned from a payroll tax to a gross receipts tax. A gross receipts tax is imposed on the total gross revenues of a company.

The payroll tax was viewed as bad for the local economy because it reduced job creation incentives, according to Breed and Yee.

The results of San Francisco’s review are not expected until next spring.