Yes on Proposition M
Cut small business taxes, other business tax reforms
What is it?
Proposition M will simplify business taxes in San Francisco, lowering some taxes while raising others, with the intention of helping existing small businesses, attracting new businesses and startups, and stabilizing tax revenues against economic shocks.
Currently, businesses operating in San Francisco face three major taxes: the Gross Receipts Tax, the Homeless Gross Receipts Tax, and annual business registration fees. The Gross Receipts Taxes are calculated, in part, using a combination of a business's revenue and payroll costs in the City.
Proposition M updates San Francisco's tax structure by focusing more on revenue from sales and less on payroll. It reduces the number of business types for the Gross Receipts tax and Homeless Gross Receipts tax, and increases the threshold for businesses that are exempt from the Gross Receipts Tax from $2.1M to $5M. It also provides tax credits for in-person work and venues.
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Why vote Yes?
The rise of remote work has fundamentally changed how businesses operate in San Francisco, and our tax code has not kept up. We need to ensure fully remote companies pay their fair share, small businesses get the help they need, and downtown is revitalized with new tenants in high rise office buildings, all while shoring up San Francisco's budget deficit. Prop M is an important step on the journey there.
Prop M will significantly reduce the tax burden on small businesses. Any small business that makes less than $5 million won't pay any business taxes — effectively removing taxes on 90% of SF's restaurant industry, affecting over 2,500 businesses. And it will eliminate permitting and licensing costs, making it far more affordable to start a small business in San Francisco.
Companies currently pay lower taxes when their workers are remote, and Prop M will ensure that those companies are paying their fair share. By focusing on sales revenue, Prop M taxes businesses in San Francisco according to their economic impact, not on how many people come to the office.
Proposition M is a common sense ballot measure that adjusts the tax structure to better reflect the current fiscal situation of the city. Vote yes.