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(a) The gross receipts tax rates applicable to the business activity of construction are:
(1) For tax years beginning on or after January 1, 2018 and ending on or before December 31, 2020:
0.3% (e.g., $3 per $1,000) for gross receipts between $0 and $1,000,000
0.35% (e.g., $3.50 per $1,000) for gross receipts between $1,000,001 and $2,500,000
0.4% (e.g., $4 per $1,000) for gross receipts between $2,500,001 and $25,000,000
0.45% (e.g., $4.50 per $1,000) for gross receipts over $25,000,000
(2) For tax years beginning on or after January 1, 2021:
0.42% (e.g., $4.20 per $1,000) for taxable gross receipts between $0 and $1,000,000
0.49% (e.g., $4.90 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000
0.56% (e.g., $5.60 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000
0.63% (e.g., $6.30 per $1,000) for taxable 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.
(d) If the final judicial decision in San Francisco Superior Court Case No. CGC-19-573230 (City and County of San Francisco v. All persons interested in the matter of Proposition C on the November 6, 2018 San Francisco ballot, authorizing an increase in specified business taxes to fund specified homeless services in San Francisco, and all matters and proceedings related thereto) has the effect of invalidating the Homelessness Gross Receipts Tax in Article 28 of the Business and Tax Regulations Code, then for tax years beginning on or after January 1 of the tax year following the date on which such court decision becomes final, the phrase “over $25,000,000” in Section 953.5(a)(2) shall be replaced with the phrase “between $25,000,000.01 and $50,000,000” and there shall be added to the rate tiers in that Section an additional rate tier for taxable gross receipts over $50,000,000 with a rate of 1.105%. This additional rate tier shall continue in effect for 20 tax years, after which the rate tiers shall return to what the rate tiers would have been absent the increase in this Section 953.5(d).
(Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014; amended by Proposition F, 11/3/2020, Eff. 12/29/2020, Oper. 1/1/2021)