Remote work, combined with soaring sales taxes, is a hurdle for San Francisco’s ailing office sector.
That’s the conclusion from the San Francisco Office of the Controller in a report on the impact of falling commercial property values on the city’s tax base, According to the San Francisco Standard.
A company with $30 billion in sales pays 20 times more local sales tax in San Francisco than it does in Mountain View, 200 times more than in San Jose, and 1,300 times more than in Sunnyvale.
The report, written in response to a letter of inquiry from Superintendent Raphael, said: “The city began the decade with the highest business tax burden in California, further aggravated by multiple rate hikes and new taxes. bear this burden.” Mandelman.
The report also concluded that remote work has had a direct tax impact.
The city’s business tax revenue is increasingly reliant on taxpayers with higher rates, who have more options to downsize or leave town, the superintendent said.
“Our unique vulnerability to some companies moving their headquarters out of San Francisco requires us to urgently explore new ways to encourage businesses to locate and grow in San Francisco, as well as strategies to make our tax base more resilient,” Mandelman said.
San Francisco’s sales tax is the city’s second-largest source of revenue after property taxes.
These include a gross receipts tax as well as new fees such as a homeless gross receipts tax and a commercial rent tax. Voters also approved an overpayment executive tax aimed at companies with large pay gaps between executives and rank-and-file workers.
The intricacies of taxes and fees during the epidemic have had a depressing effect on business, encourage them Keep employees at home to save taxes.
“We have a series of retaliatory, economically myopic, politically motivated tax proposals,” Wade Rose, president of the business advocacy group Advance SF, told the Standard.
“Now we have a situation where the city doesn’t have a diverse tax base, it faces more volatility and the prices pretty much exclude itself from the market where big companies are based here,” he said.
Mayor London Breed and local officials Urges overhaul of city’s tax structure Attract businesses back and revitalize downtown. The finance chief’s study laid the groundwork for what could become a tax reform ballot measure in November 2024, the newspaper reported.
— Dana Bartholomew