San Francisco Proposition M

Changes to Business Taxes

This measure would change various taxes and fees charged to businesses, including the gross-receipts tax, the homelessness gross-receipts tax, the overpaid-executive gross-receipts tax, the administrative office tax and business-registration fees. It would increase the small-business exemption from the gross-receipts tax from $2.25 million to $5 million. It would also reduce the number of business types from 14 to seven for the gross-receipts and homelessness gross-receipts taxes, and calculate gross receipts more on sales and less on payroll expenses, depending on the type of business.

Over a 20-year period, The City’s chief economist has forecast that the proposal would have a positive effect on the city’s economy, leading to an average increase of more than 1,900 jobs, while the percentage of business-tax revenue coming from the five largest payers would be reduced from 28% to 23%.

Argument for: Prop. M would provide needed tax relief to more than 2,700 small businesses, including 90% of restaurants. It would eliminate more than $10 million in permitting and license fees and reduce the incentive for large employers to leave San Francisco by reducing the emphasis on taxing payrolls, which penalizes employers for having workers in The City, a factor that has contributed to record-high office-vacancy rates.

Argument against: Prop. M is the result of backroom dealmaking that lowers taxes for special interests while raising them for others. While some small businesses might receive minimal tax breaks, others — especially mid-sized and large businesses — would see taxes double and even quadruple. The measure is not “revenue neutral” as advertised and instead would cause a tax increase of $50 million per year, which will cause businesses to cut investments and jobs and reconsider operating in The City.



https://www.sfexaminer.com/news/politics/2024-sf-voter-guide-local-propositions-measures-on-ballot/article_97615262-7776-11ef-913a-ebf36660f047.html