On November 6, San Francisco voters approved Measure C, Homelessness Gross Receipts Tax, a new tax ordinance that could significantly increase the existing gross receipts tax liability for many businesses operating in San Francisco. Measure C is additive to the existing San Francisco tax regime and, effective January 1, 2019, will operate in conjunction with other existing payroll, gross receipts, and rent tax provisions.
Effective January 1, 2019, the San Francisco Homelessness Gross Receipts Tax will impose significant additional tax on many businesses operating in the city. For some taxpayers, this new tax measure could effectively double their San Francisco gross receipts tax liability. Unless a taxpayer successfully challenges San Francisco’s interpretation of Upland, this tax should go into effect as provided. Accordingly, businesses should be prepared to increase their 2019 estimated payments beginning with the first estimated payment due April 30, 2019, and should start modeling out their increased San Francisco tax liabilities for 2019 budgeting purposes.