GREENBERG & GREENBERG
2088 Chestnut Street
San Francisco, California 94123
Tel: 415.775.9503 / Fax: 415.775.4516
LOCAL NEWS FOR SMALL BUSINESSES
October 17, 2004
It's no secret that San Francisco faces a budget shortfall for the upcoming fiscal year. The City proposes to close the gap by introducing Measure J & Measure K, two of the most important and contentious issues in this November's election.
If Measure K passes, the following new taxes will be enacted:
Gross Receipts Tax:: A new tax on the gross receipts of all SF
businesses will be imposed. As proposed, the new tax will be .5% of gross
sales (businesses with $500k or less in sales will be exempt).
Expanded San Francisco Payroll Tax for S Corps, Partnerships, LLC
and LLP: : Currently, only wages paid to S Corp shareholders and guaranteed
payments to Partners and LLC/LLP members are subject to the tax. Measure
K would expand the assessment of the tax to include distributions.
Measure J: Local Sales Tax Increase: If Measure J passes, the sales
tax in San Francisco will increase to 8.75%, from today's 8.50%.
In addition to Measure J & K, there are also Measures A & B:
Both of these measures will be financed through additional property tax
assessments, since the City does not currently project enough funds from
the General Fund will be available for repayment.
Measure A: $200M Bond and Property Tax Assessment: In its efforts
to provide more affordable housing for low-income and homeless residents,
the City proposes to issue (borrow) a $200M bond for low-income housing
development. Rather than debt service (principal & interest payments)
being made from the City's general fund, Measure A proposes to add an
additional assessment on residential and commerical owners' property taxes.
The City controller's office estimates that for each $100k of assessed
value , the annual additional assessment on your property tax bill would
be approximately $15. Therefore, if your property is valued at $500k,
the average annual cost to each property owner for this Measure would
be approximately $75.
MEASURE B: $60M HISTORICAL PRESERVATION BONDS.......... The City needs to repair certain historical buildings (i.e.: Palace of Fine Arts, McLaren Lodge, Coit Tower) and needs to borrow funds to take care of it. As is the case with Measure A, Measure B would fund repayment of the bonds through an additional property tax assessment. The City controller's office estimates that the annual cost per $100k of property valuation would run around $4.29 annually.
A two-thirds majoirty approval is required for passage of Measure A & B.
For more information, feel free to contact Glenn Greenberg.
Tax, Payroll and Financial Services
Local News for Small Businesses