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(a) The base gross receipts tax rate provided by this Section is applicable to the business activity of construction. Commencing on the operative date of the Gross Receipts Tax Ordinance, the Controller shall compute the tax rate in accordance with Section 959, but the base tax rate provided by this Section is:
0.300% (e.g., $3 per $1,000) for gross receipts between $0 and $1,000,000
0.350% (e.g., $3.50 per $1,000) for gross receipts between $1,000,001 and $2,500,000
0.400% (e.g., $4 per $1,000) for gross receipts between $2,500,001 and $25,000,000
0.450% (e.g., $4.50 per $1,000) for gross receipts over $25,000,000
(b) Construction includes the activity of preparing sites for, subdividing land for, or working on, buildings or engineering projects (including highways and utility systems); it includes business activity described in NAICS code 23.
(c) The amount of gross receipts from construction subject to the gross receipts tax shall be one-half of the amount determined under Section 956.1 plus one-half of the amount determined under Section 956.2. The amount of gross receipts so determined shall then be reduced by any amounts which were included in a person's gross receipts within the City pursuant to Section 956.1, and which that person paid to a subcontractor possessing a valid business registration certificate with the City during the tax year. There shall be no reduction for any other costs, including without limitation costs for materials, fees, equipment, or other services. In order to claim such a reduction, a person must maintain an itemized schedule of payments to subcontractors and information sufficient to enable the Tax Collector to verify that the subcontractor possessed a valid business registration certificate with the City.
(Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014)