Measure to lower some SF business taxes qualifies for November ballot

Donald Trump wants to lower taxes.  Joe Biden wants to raise taxes.  It looks like those running San Fran want lower taxes on businesses—and Google, which would greatly benefit from this has donated $500,000 to lower their taxes—but raise taxes on others.  This is called a Greedy Corporation.

“In announcing the tax-overhaul deal, proponents emphasized its benefits for small-business owners, and the measure was submitted to city elections officials by two small-business representatives, Masood Samereie, president of the Council of District Merchants and Laurie Thomas, president of the Golden Gate Restaurant Association.

For big businesses, the measure seeks to reduce the concentration of taxes coming from a small number of companies, with the collective percentage of business taxes coming from the top five payers expected to drop from 28% to 23%.”

The elite and rich are literally paying to lower their taxes—while hurting everyone else.

Measure to lower some SF business taxes qualifies for November ballot

Patrick Hoge, SF Examiner,  7/9/24    https://www.sfexaminer.com/news/business/san-francisco-business-tax-measure-hits-november-2024-ballot/article_e6d379b4-3e29-11ef-8d38-ff6972fdd7b0.html

A business-tax reform measure that would have San Francisco initially forego some tax revenue by lowering levies for some companies while raising them for others in an effort to support and retain businesses in The City qualified this week for the November ballot.

The committee supporting the tax proposition, which was worked out with the mayor and other top city officials, had already received $770,00 in contributions by the end of June, according to a disclosure filing. Proponents had spent $553,743 of the money raised.

Going by the name “Revitalize San Francisco, a coalition of small businesses, tech companies and business groups,” the committee had received its biggest contribution, of $500,000, from Google, the Internet search giant that has thousands of workers in San Francisco.

“This measure will simplify the business tax code, create more stable revenues for the City, and cut taxes for many businesses that drive this city’s economy, which are some of the many reasons why we support it,” read a statement provided by a Google spokesperson.

The Committee to Expand the Middle Class Issues Committee, sponsored by Airbnb, contributed $250,000. An Airbnb spokesperson declined to comment.

The Hotel Council of San Francisco also contributed $20,000.

City and business leaders announced agreement in early May on the proposed business-tax overhaul, a compromise that has some winners and some losers. On June 20, proponents submitted 23,357 signatures to the San Francisco Department of Elections, which issued a letter Monday finding that the 10,029 signature threshold for ballot qualification had been met.

The measure, titled the “Local Small Business Tax Cut Ordinance,” needs just over 50% approval from voters in November to pass.

In announcing the tax-overhaul deal, proponents emphasized its benefits for small-business owners, and the measure was submitted to city elections officials by two small-business representatives, Masood Samereie, president of the Council of District Merchants and Laurie Thomas, president of the Golden Gate Restaurant Association.

For big businesses, the measure seeks to reduce the concentration of taxes coming from a small number of companies, with the collective percentage of business taxes coming from the top five payers expected to drop from 28% to 23%.

Top city finance officials have warned that San Francisco’s business taxes are relatively high, fall disproportionately on a few large companies, present risks of companies locating operations elsewhere and drive tax loss from remote work.

To reduce the incentive for companies to relocate or have employees work remotely, the measure would shift away from calculating taxes based on relative payroll in San Francisco and toward sales into The City.

‘It’s going to shift the tax rates in a way so you are not punished for having employees here,” said Alex Bastian, president and CEO of the Hotel Council of San Francisco and one of the leaders of the reform effort.

In addition, organizers say the proposed measure would cut $10 million in fees and simplify the tax system. One hope is that eliminating complexity will reduce the potential for conflicts between taxpayers and The City, which has paid out tens of millions of dollars in legal disputes over business taxes in recent years in the wake of voters approving new business-tax measures.

Small-business owners would benefit because the measure would raise the exemption threshold for paying The City’s gross-receipts tax rise from around $2 million to $5 million. San Francisco officials estimated that 88% of all restaurants and 50% of retailers that now pay gross-receipts taxes would be exempt if the measure passes.

Hotels, arts, entertainment and recreation businesses would also get tax cuts, among others, while biotechnology, specified financial services, wholesale trade and utilities would be among sectors getting increases.

Basttian said that instead of hotels facing a scheduled 30% increase in gross receipts taxes next year, the measure would provide them with a 12% decrease.

Hotels have been facing big financial challenges with continued lower tourism since the COVID-19 pandemic — occupancy rates have been in the 60% range versus the 80% average from past years — as well as higher costs in various categories, Bastian said.

“We are in a spot where any help goes a long way,” he said.

The reform package was the result of a process involving small and large businesses, labor representatives and others that was initiated by Mayor London Breed, Board of Supervisors President Aaron Peskin and Supervisor Rafael Mandelman.

It reflected an extraordinary level of agreement that intervention was needed to stimulate and protect a wounded local economy that has been sluggish since the pandemic.

City officials projected that the reform package would be revenue neutral over time, with initial reductions of collections offset by future increases.

“It will show investors and the business community that San Francisco is willing to take steps in the right direction when it comes to creating a more business friendly climate,” Bastian said. “This really is an example of everyone working together to put the city first with this compromise.”