Supervisors forward ordinance postponing new gross‑receipts rates, preserving startup credits for targeted ZIP codes
July 12, 2023 | San Francisco County, California
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The San Francisco Board of Supervisors Budget and Appropriations Committee on July 12 voted 3–0 to forward to the full Board an ordinance that postpones the imposition of certain new gross‑receipts tax rates and defines startup tax credits for new business locations in specified ZIP codes.
The ordinance, as read into the record, would extend through Dec. 31, 2024 the gross‑receipts tax rates that were in effect on Jan. 1, 2022 for several business activities and postpone the implementation of rates scheduled to take effect Jan. 1, 2023. It also provides a temporary tax credit for eligible businesses that open a physical location in listed ZIP codes; the legislation sets the credit at 0.45% of San Francisco taxable gross receipts for certain business activities or 0.7% of taxable payroll for administrative offices, for up to three tax years and not to exceed $1,000,000 per tax year.
Why it matters: supporters framed the changes as part of the city’s broader budget package to manage implementation timing and support certain location‑based incentives; critics warned the credits could favor tech and AI companies and accelerate displacement in neighborhoods.
During public comment, Eileen Bogan of the Coalition for San Francisco Neighborhoods said she opposed the credits "unless amended," arguing the relief could benefit the tech sector — including AI companies — and intensify gentrification and displacement. "Is this yet another version of the Twitter tax break?" Bogan asked.
The committee did not take additional amendments at the hearing; Chair Supervisor Connie Chan said substantive amendments narrowing eligible ZIP codes to areas concentrated downtown had already been made at the prior hearing. With no further speakers in the chamber or online, Chan moved to forward the ordinance to the full Board with a positive recommendation; Supervisor Asha Safai seconded. The roll call vote recorded three ayes (Safai, Walton, Chan) with two supervisors excused; the motion passed.
Next steps: the ordinance is scheduled to appear on the Board of Supervisors agenda for July 18 for further consideration by the full Board.
The ordinance, as read into the record, would extend through Dec. 31, 2024 the gross‑receipts tax rates that were in effect on Jan. 1, 2022 for several business activities and postpone the implementation of rates scheduled to take effect Jan. 1, 2023. It also provides a temporary tax credit for eligible businesses that open a physical location in listed ZIP codes; the legislation sets the credit at 0.45% of San Francisco taxable gross receipts for certain business activities or 0.7% of taxable payroll for administrative offices, for up to three tax years and not to exceed $1,000,000 per tax year.
Why it matters: supporters framed the changes as part of the city’s broader budget package to manage implementation timing and support certain location‑based incentives; critics warned the credits could favor tech and AI companies and accelerate displacement in neighborhoods.
During public comment, Eileen Bogan of the Coalition for San Francisco Neighborhoods said she opposed the credits "unless amended," arguing the relief could benefit the tech sector — including AI companies — and intensify gentrification and displacement. "Is this yet another version of the Twitter tax break?" Bogan asked.
The committee did not take additional amendments at the hearing; Chair Supervisor Connie Chan said substantive amendments narrowing eligible ZIP codes to areas concentrated downtown had already been made at the prior hearing. With no further speakers in the chamber or online, Chan moved to forward the ordinance to the full Board with a positive recommendation; Supervisor Asha Safai seconded. The roll call vote recorded three ayes (Safai, Walton, Chan) with two supervisors excused; the motion passed.
Next steps: the ordinance is scheduled to appear on the Board of Supervisors agenda for July 18 for further consideration by the full Board.
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