UPDATE: San Francisco 2016 Gross Receipts Tax and Payroll Expense Tax - Important Information for BOMA Members

UPDATE - September 29, 2016

The San Francisco Controller recently announced the 2016 Payroll Expense Tax rate of 0.829% (0.00829) as provided in Business and Tax Regulations Code section 903.1. The Gross Receipts Tax Rate Adjustment Factor is 50% per Code Section 959. They have updated our website with the information here: http://sftreasurer.org/2016-tax-rates. 

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Original Post -  January 20, 2016

Please take a moment to review this important message regarding San Francisco's Gross Receipts Tax and Payroll Expense Tax.

2015 Return is Live - Due by February 29, 2016

The 2015 Gross Receipts Tax and Payroll Expense Tax Year Online Return is now live at https://etaxstatement.sfgov.org/GrossReceipts2015.

To enter the Online Return you will need:

• Seven digit Business Account Number
• Last four digits of your business tax identification number (Federal EIN or SSN
• Eight digit alphanumeric Online PIN (same as prior year)

Please note the following:

• Payroll Expense Tax and Gross Receipts Tax returns are due by February 29, 2016. 
• Online forms must therefore be transmitted before midnight on February 29, 2016. 
• Payments must be received or postmarked on or before February 29, 2016. 
• Penalties, interest, and fees will be imposed after February 29, 2016. 
• Your total tax obligation will be summarized and displayed at the end of the filing.
• You may review and update your business information through Account Update prior to starting this filing.

The San Francisco Office of the Treasurer and Tax Collector will send out filing notices the week of January 11 that will include the Business Account Number, Online PIN, and other information to assist BOMA members and other taxpayers with filing their Return.

In response to taxpayer feedback, the Office of the Treasurer has added additional help features, including instructions embedded on each page, as well as links to technical advisories. We have also simplified the process to access the residential landlord filing and the Online EZ filing for small businesses. They believe these changes will provide a more streamlined filing experience for taxpayers.

Free Seminar - Gross Receipts Tax Seminar

Thursday, February 11

3 PM- 4:30 PM

SF Public Library

100 Larkin St,

San Francisco, CA

Koret Auditorium

The seminar will focus on the online form, minor changes that have been made to the form, and the ease of use and access.

San Francisco Business Tax Reform Annual Report 2015

Key Information 

• Two of the largest sectors in the city, Professional and Financial Services, along with Real Estate, paid nearly 50% of all gross receipts taxes in 2014. 
• Accordingly, since the gross receipts tax and business registration fee collections were smaller than expected, the payroll expense tax rate for 2015 will be larger than the baseline: 1.162% as opposed to 1.125%: a difference of 4%.
• Given that small variance, and the uncertainty regarding the gross receipts tax based on only one year of data, in our opinion it is too soon to project if the payroll expense tax will be fully phased-out by 2018
• Audits and other compliance efforts in the coming years will provide more insight into revenue trends seen with the initial filing data.

Please click here to review the report.

• In November, 2012, San Francisco voters approved Proposition E, which imposed a new gross receipts tax on businesses, began the process of replacing the City's payroll expense tax, and raised and restructured the City's business registration fee. 
• The gross receipts tax is designed to phase in, with gradually rising rates, over a 5 year period ending in 2018. Based on the amount of gross receipts tax collections each year, the payroll expense tax rate in the subsequent year is reduced, through a formula, to ensure the two taxes together are revenue-neutral to the City. 
• In August, 2015, based on the results of the 2014 filing, the Controller's Office calculated the payroll expense tax rate for 2015 to be 1.162%, down from 1.350% in 2014. 
• Proposition E also requires the City Controller, Chief Economist, and Treasurer to annually report on the fiscal and economic impacts of the new tax system, how these compare to expectations, and any implementation challenges and recommendations. 
• This report for 2015 is the first of these annual joint reports.