Local government leaders are aiming to soften COVID-19’s blow to the economy by overhauling the city’s tax structure.
It would also increase taxes on all revenue certain businesses generate from normal operations. These are called gross receipt taxes.
The changes are meant to incentivize employment. City accounting officials estimate the pandemic gutted 100,000 jobs this year. And it anticipates the city won’t return to last year’s employment levels for five years.
The measure halves registration fees for small businesses with annual revenues of under a million dollars. It would raise the exemption from gross receipts taxes for small businesses to $2 million from $1 million.
Hard-hit sectors like retail, hospitality, and the arts and entertainment industries will get tax breaks in the first two years after the measure’s passage.
Measure F would increase tax rates for some sectors, like tech and real estate over three years beginning 2022.
City officials estimate these changes could bring in additional annual revenues of $97 million. The city currently generates about $1 billion annually from business taxes. The entire budget for the city between 2019 and 2020 was just over $12 billion.
The measure implements tax changes to generate funds if the city loses legal challenges to two voter approved tax measures funding childcare and homeless services.
This move would allow San Francisco to start spending the $1.5 billion of revenue that it’s has already collected.
The Mayor and the Board of Supervisors back the measure. Other supporters include neighborhood business groups, childcare centers, Parents for Public Schools, and unions representing firefighters, healthcare workers and educators and affordable housing advocates.
The San Francisco Chamber of Commerce, other business groups and the Libertarian Party oppose any tax increases.
Chamber CEO Rodney Fong says local government needs to use tax revenues more responsibly.
If you support the changes to the city's business tax structure, vote yes. If you don’t, vote no.