Yes on Proposition C
Decreases to Business Taxes
What is it?
Beginning in 2027, Proposition C would make two changes to City business taxes.
- Raise the small business tax exemption from $5M to $7.5M in SF gross receipts, so they would not be subject to this tax.
- Raise rates slightly for other businesses.
All thresholds would automatically adjust with the Consumer Price Index.
According to the Controller's Office, the changes would reduce annual City revenue by an estimated $30M to $40M.
Competing measure
Prop D is also on this ballot and changes the same tax code. Prop C makes smaller rate adjustments and raises the small business exemption, while Prop D significantly increases rates and changes how the tax rate is calculated by looking at compensation across all employees, globally, not just those located in SF.
If both pass, the one with more votes wins. Prop C's conflicting measures clause allows non-conflicting parts of the losing measure to still take effect. Prop D's clause would void the loser entirely.
Read the full annotated legal text →
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Why vote Yes?
Prop C is a balanced adjustment to SF business taxes that helps small businesses while raising rates on larger ones to partially offset the cost.
Here's the core issue: the $5M small business exemption voters approved in Prop M (2024) was a huge step forward, but costs keep rising. Bay Area prices have climbed roughly 15% since 2021, and for businesses, the increases in rent, labor, and supplies have been even steeper. A restaurant, retailer, or service business doing $6M in gross receipts is not a corporate giant — it's a mid-size employer with thin margins that's getting squeezed. Raising the exemption to $7.5M would keep the threshold in line with real-world costs and extend tax relief to more of these growing businesses.
Is Prop C a perfect solution? No. The rate increase is small and won't fully close the revenue gap, but it's the reasonable, moderate solution on this ballot. San Francisco cannot tax its way to prosperity — and Prop C reflects the reality that keeping small businesses alive and growing is what will ultimately generate the revenue the city needs.
Vote Yes on Prop C to keep San Francisco affordable for small businesses.