SAN FRANCISCO (KCBS)—A tax ballot measure that’s being introduced this week at the San Francisco Board of Supervisors would dramatically increase the number of businesses that pay into the business tax.

As things stand now, only about 10 percent of the city’s businesses pay the business tax, according to Jim Lazarus, senior vice president of San Francisco’s Chamber of Commerce. He said things would change and that it would likely quadruple that number because business taxes would be based on gross receipts instead of payroll.

“You could have some small businesses with low payroll, but high gross receipts that will end up paying a small tax, where now they don’t pay anything,” Lazarus said.

Supervisor David Chiu, who is sponsoring this legislation with Mayor Lee, said a gross receipts tax levels the playing field and stops punishing companies that do well and expand.

KCBS’ Barbara Taylor Reports:

Chiu said taxing payroll, something he equated to salaries, creates a dis-incentive when it comes to employee hiring.

Service businesses such as restaurants, that are labor intensive, might benefit. Those with few employees and lots of revenue would likely pay higher taxes.

While the stated goal is to be revenue neutral, all businesses would see an increase in their annual license fee if this proposal is ultimately approved by voters in November.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)


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