Voters approving Prop. F, a business tax reform measure

Voters are favoring Proposition F, a reform of a San Francisco business tax supporting a complete elimination of a levy...

Voters are favoring Proposition F, a reform of a San Francisco business tax supporting a complete elimination of a levy on payroll and generating new revenue in the coming years.

In returns released early Wednesday, 219,205 residents, or 68.27 percent, voted yes, and 101,885, or 31.73 percent, voted no for the proposal.


Prop. F, the Business Tax Overhaul, was placed on the ballot by Mayor London Breed and the Board of Supervisors to reform the way The City taxes businesses.

It would finish the planned phasing out of the payroll tax in favor of only a gross receipts tax on businesses, which began with voter-approved Proposition E in 2012. It adjusts the rates to increase right away the tax on Big Tech, otherwise known as informational services, to equal the rates paid by industries financial services.

Other industries will start to see a gradual tax increase beginning in 2022. When fully implemented, The City is expected to generate $97 million annually.

The measure gives a temporary tax break to some of the hardest hit industries by the COVID-19 pandemic, including hotels, restaurants, manufacturing and retail.

More small businesses are exempted from paying the gross receipts on the measure as well. The exemption would increase from the current $1 million increase the threshold under which small businesses are exempt from paying the gross receipts tax. Businesses with under $1.17 million gross receipts currently do not pay the tax; that would increase to $2 million.

The San Francisco Realtors Association led a campaign against the measure, while the San Francisco Labor Council campaigned for the measure.

To kick off the campaign for the measure in October, Breed said in a statement, “I’m proud we’ve come together on Proposition F, which will reform our business taxes, release critical funding for childcare, and provide new revenue to help support our city as we emerge from this pandemic.”

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