(a) A person or combined group that opens a physical location in the Designated Areas on or after January 1, 2023 through and including December 31, 2027, shall be allowed a credit against that person or combined group’s Gross Receipts Tax if the person or combined group did not have a physical location in the City for at least three years prior to opening the physical location. The credit under this Section 960.1 shall be an annual credit for each of up to three tax years immediately following the tax year in which the person or combined group opened the physical location in the Designated Areas, provided the person or combined group maintains a physical location in the Designated Areas in the tax year that the credit is taken. To be eligible for the credit, the person or combined group must take the credit for each tax year on an original Gross Receipts Tax return filed with the Tax Collector. The credit shall be in an amount per tax year, not to exceed $1,000,000 per tax year, calculated as follows:
(1) for a person or combined group not engaged in business within the City as an administrative office, as defined in Section 953.8 of Article 12-A-1, 0.45% of the person or combined group’s taxable gross receipts during the tax year from one or more of the business activities of information, administrative and support services, financial services, insurance, and professional, scientific and technical services, as those activities are defined in Sections 953.2, 953.4, and 953.6 of this Article 12-A-1, without regard to any application of Section 953.9 of Article 12-A-1; or
(2) for a person or combined group engaged in business within the City as an administrative office, as defined in Section 953.8 of Article 12-A-1, 0.7% of the person or combined group’s taxable payroll expense during the tax year.
(b) For purposes of this Section 960.1:
(1) “Designated Areas” means the areas in the City located in zip codes 94102, 94103, 94104, 94105, 94107, 94108, 94109, 94111, 94133, and 94158, as those zip codes exist on the effective date of the ordinance adding this Section 960.1.
(2) “Opens a physical location” means that the person or combined group opens, by acquiring real property or pursuant to an agreement with a term for at least six months, a location of the person or combined group that is available for the person or combined group’s use and can accommodate one or more employees.
(3) In determining whether a person or combined group had a physical location in the City prior to opening a physical location, any physical location in the City of the person or combined group’s predecessor in interest shall be deemed a physical location in the City of that person or combined group.
(4) The acquisition of an existing business shall not constitute the opening of a physical location.
(5) In determining whether a person or combined group had a physical location in the City prior to opening a physical location, and in determining whether a person or combined group has opened a physical location in the Designated Areas:
(A) A physical location shall not include a home or other residential location and shall also not include a location for a short-term residential rental use, as that term is defined in Section 41A.4 of Chapter 41A of the Administrative Code, as may be amended from time to time; and
(B) A person or combined group that owned or leased real property all of which such person or combined group leased or subleased to a third party that was not in such person’s combined group and did not lease back shall not be considered to have had or opened a physical location as a result of owning or leasing that real property for the time period in which the real property was leased or subleased to the third party.
(c) For purposes of this Section 960.1, “taxable gross receipts” means a person or combined group’s gross receipts, not excluded under Section 954 of Article 12-A-1, attributable to the City.
(d) For purposes of this Section 960.1, “taxable payroll expense” means “payroll expense” as defined in Section 953.8(f) of Article 12-A-1, attributable to the City.
(e) In no event shall the credit under this Section 960.1 reduce a person or combined group’s Gross Receipts Tax liability to less than $0 for any tax year. The credit under this Section shall not be refundable and may not be carried forward to a subsequent tax year.
(f) Notwithstanding Section 6.22-1 of the Business and Tax Regulations Code or any other provision of law that would limit public disclosure, the person or each person in the combined group that is engaging in business within the City waives any right to confidentiality in the fact that it has claimed any credit under this Section 960.1 for a particular tax year. Nothing in this subsection (f) shall constitute a waiver of the confidentiality of the information in the person or combined group’s Gross Receipts Tax return, including the amount of any credit claimed under this Section, other than the fact that the person or combined group has claimed a credit under this Section.
(h) Commencing with a report filed no later than October 31, 2024, for the 2023 tax year, the Tax Collector shall submit an annual report by October 31 of the calendar year following each tax year to the Board of Supervisors for each tax year for which the credit under this Section 960.1 is in effect that sets forth aggregate information on the dollar amount of the credits taken each year and the number of businesses taking the credit.
(Added by Ord. 151-23, File No. 230155, App. 7/28/2023, Eff. 8/28/2023, Retro. 1/1/2023)