January 08, 2019
New Propositions C and D passed by the City of San Francisco will have an impact on certain companies that do business in San Francisco. As an additional note of caution, if a business has nexus in San Francisco, then they will most likely have nexus in the state of California as well
Proposition C had two separate parts that passed and are effective February 28, 2019:
Businesses located in San Francisco with more than $1 million in total gross receipts for federal tax purposes and at least 1,000 U.S. employees whose activities are classified as an administrative office under the new ordinance will be required to pay an annual homelessness administrative office tax, which is equal to 1.5 percent of San Francisco payroll. This is in addition to the already existing 1.4 percent administrative office tax rate of San Francisco payroll.
New Proposition D is a result of the SCOTUS decision in the Wayfair case. Proposition D expands the meaning of engaging in business within the city of San Francisco. Any business with more than $500,000 in total gross receipts assigned to San Francisco must register with the city, even if they have no physical presence of any kind. As a result, these businesses will be subject to registration fees, unless exempted.