Business Rent Tax

This proposal would establish a new local tax on the rent businesses pay in San Francisco.  Already struggling small businesses, not-for-profits and even government tenants would all be affected.  It would put local businesses at a competitive disadvantage as businesses located outside of the City but operating within it will not have to pay this tax.  The proposal would also establish a tiered payroll tax that would penalize businesses for hiring employees with a salary of $85,000 a year or more.

The end result would be fewer local jobs at lower wages as employers are forced to devote more income to rent as opposed to wages and benefits for employees.  In fact, the San Francisco Controller projects private sector job losses over the next ten years if this tax is implemented.  Targeting the sectors of our economy that are growing and have the most potential for growth in the future is the wrong prescription for improving our local economy and creating jobs for working families.

This tax will also have a destabilizing impact on the City budget.  Relying on commercial rental incomes that are subject to large swings in rates and occupancy would leave the City vulnerable to even worse budget deficits in down years than we are currently experiencing. Now more so than ever, San Francisco needs more budget stability, not less.

Finally, the new tax will also cost the City more in administrative and enforcement expenses as additional bureaucracy would be needed to collect the tax and to audit landlords.