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If a person, or a combined group as described in Section 956.3, engages in business activities described in more than one of Sections 953.1 through 953.7, inclusive, or engages in business activities listed in more than one of subsections 953.1(a)(2), 953.1(a)(3), 953.2(a)(2), 953.2(a)(3), 953.2(a)(4), 953.2(a)(5), 953.3(a)(2), 953.3(a)(3), 953.4(a)(2), 953.4(a)(3), 953.6(a)(2), and 953.6(a)(3), the rate or rates of gross receipts tax to be applied to that person or combined group, and the method for determining gross receipts in the City, shall be determined as follows:
(a) If more than 80% of its gross receipts, determined in accordance with Section 956, are derived from business activities described in only one of Sections 953.1 through 953.7, inclusive, then the rules of that applicable Section apply to all of its gross receipts derived from all business activities. If the Section from which the person or combined group derived more than 80% of its gross receipts includes different rates for different business activities described in that Section, then the rates applicable to the gross receipts that are deemed to be from business activities described in that Section shall be the rates that apply to the business activities within that Section from which the person or combined group derived the most taxable gross receipts, or if there is not a single business activity within that Section from which the person or combined group derived the most taxable gross receipts because the person or combined group derived the same amount of taxable gross receipts from one or more business activities within the Section, then the rates applicable to the gross receipts that are deemed to be from business activities described in that Section shall be the highest rates within that Section that apply to business activities from which the person or combined group derived the same amount of taxable gross receipts.
(b) If its business activities in the City are described in more than one of Sections 953.1 through 953.7, inclusive, or are listed in more than one of subsections 953.1(a)(2), 953.1(a)(3), 953.2(a)(2), 953.2(a)(3), 953.2(a)(4), 953.2(a)(5), 953.3(a)(2), 953.3(a)(3), 953.4(a)(2), 953.4(a)(3), 953.6(a)(2), and 953.6(a)(3), and, after applying subsection (a) of this Section 953.9, the person or combined group remains subject to the rates in more than one of Sections 953.1 through 953.7, inclusive, or more than one of subsections 953.1(a)(2), 953.1(a)(3), 953.2(a)(2), 953.2(a)(3), 953.2(a)(4), 953.2(a)(5), 953.3(a)(2), 953.3(a)(3), 953.4(a)(2), 953.4(a)(3), 953.6(a)(2), and 953.6(a)(3), then such person or combined group shall separately compute the gross receipts tax for each set of business activities as provided in the Section or subsection applicable to that particular set of business activities, modified as follows:
(1) if the set of business activities described in any of Sections 953.1 through 953.7, inclusive, generates less than 20% of the total gross receipts of the person or combined group, then the receipts and payroll of any such set of activities may be combined for all purposes related to computing the gross receipts tax with whichever set of that person’s or combined group’s activities are taxed at the highest rate;
(4) the applicable rate for each set of business activities shall be determined in numbered order of the Sections and subsections describing each set of business activities; e.g., the gross receipts and tax for business activities described in subsection 953.1(a)(2) should be determined first, subsection 953.1(a)(3) second, subsection 953.3(a)(2) third, and so on;
(5) the rate(s) applicable to any set of activities after the first shall be determined by adding together the gross receipts determined for all previous sets of activities and applying the rate scale commencing with the total gross receipts so determined; and
(6) the gross receipts tax liability for the person or combined group shall be the sum of the liabilities for each set of business activities.
(c) This Section 953.9 shall not apply to tax years beginning on or after January 1, 2025.
(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; Proposition M, 11/5/2024, Eff. 12/20/2024)
(Added by Proposition F, 11/3/2020, Eff. 12/29/2020, Oper. 1/1/2021; Proposition M, 11/5/2024, Eff. 12/20/2024)
(a) The gross receipts tax rates applicable to Category 1 Business Activities are:
(1) For tax years 2025 and 2026:
0.1% for taxable gross receipts between $0 and $1,000,000
0.13% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.18% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.336% for taxable gross receipts between $25,000,000.01 and $50,000,000
0.336% for taxable gross receipts between $50,000,000.01 and $75,000,000
0.336% for taxable gross receipts between $75,000,000.01 and $100,000,000
0.336% for taxable gross receipts between $100,000,000.01 and $150,000,000
0.504% for taxable gross receipts between $150,000,000.01 and $250,000,000
0.672% for taxable gross receipts between $250,000,000.01 and $500,000,000
0.84% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
1.008% for taxable gross receipts over $1,000,000,000
(2) For tax year 2027:
0.104% for taxable gross receipts between $0 and $1,000,000
0.135% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.187% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.356% for taxable gross receipts between $25,000,000.01 and $50,000,000
0.356% for taxable gross receipts between $50,000,000.01 and $75,000,000
0.356% for taxable gross receipts between $75,000,000.01 and $100,000,000
0.356% for taxable gross receipts between $100,000,000.01 and $150,000,000
0.534% for taxable gross receipts between $150,000,000.01 and $250,000,000
0.712% for taxable gross receipts between $250,000,000.01 and $500,000,000
0.89% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
1.068% for taxable gross receipts over $1,000,000,000
(3) For tax years beginning on or after January 1, 2028:
0.107% for taxable gross receipts between $0 and $1,000,000
0.139% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.193% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.372% for taxable gross receipts between $25,000,000.01 and $50,000,000
0.372% for taxable gross receipts between $50,000,000.01 and $75,000,000
0.372% for taxable gross receipts between $75,000,000.01 and $100,000,000
0.372% for taxable gross receipts between $100,000,000.01 and $150,000,000
0.557% for taxable gross receipts between $150,000,000.01 and $250,000,000
0.743% for taxable gross receipts between $250,000,000.01 and $500,000,000
0.929% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
1.115% for taxable gross receipts over $1,000,000,000
(b) “Category 1 Business Activities” means one or more of the business activities described in NAICS codes 42 (Wholesale Trade), 44 and 45 (Retail Trade), 532 (Rental and Leasing Services), 71 (Arts, Entertainment, and Recreation), 722 (Food Services and Drinking Places), 811 (Repair and Maintenance), 812 (Personal and Laundry Services) but not including 812930 (Parking Lots and Garages), and 813 (Religious, Grantmaking, Civic, Professional, and Similar Organizations).
(Added by Proposition M, 11/5/2024, Eff. 12/20/2024)
New Ordinance NoticePublisher's Note: This section has been ADDED by new legislation (Ord. 214-24
, approved 8/8/2024, effective 9/8/2024, oper. if approved by electorate and not terminated). The text of the amendment will be incorporated under the new section number when the amending legislation is operative.
(a) The gross receipts tax rates applicable to Category 2 Business Activities are:
(1) For tax years 2025 and 2026:
0.185% for taxable gross receipts between $0 and $1,000,000
0.201% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.253% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.331% for taxable gross receipts between $25,000,000.01 and $50,000,000
0.582% for taxable gross receipts between $50,000,000.01 and $75,000,000
0.582% for taxable gross receipts between $75,000,000.01 and $100,000,000
0.582% for taxable gross receipts between $100,000,000.01 and $150,000,000
0.582% for taxable gross receipts between $150,000,000.01 and $250,000,000
0.582% for taxable gross receipts between $250,000,000.01 and $500,000,000
0.582% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
0.582% for taxable gross receipts over $1,000,000,000
(2) For tax year 2027:
0.192% for taxable gross receipts between $0 and $1,000,000
0.209% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.264% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.351% for taxable gross receipts between $25,000,000.01 and $50,000,000
0.617% for taxable gross receipts between $50,000,000.01 and $75,000,000
0.617% for taxable gross receipts between $75,000,000.01 and $100,000,000
0.617% for taxable gross receipts between $100,000,000.01 and $150,000,000
0.617% for taxable gross receipts between $150,000,000.01 and $250,000,000
0.617% for taxable gross receipts between $250,000,000.01 and $500,000,000
0.617% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
0.617% for taxable gross receipts over $1,000,000,000
(3) For tax years beginning on or after January 1, 2028:
0.198% for taxable gross receipts between $0 and $1,000,000
0.215% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.271% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.366% for taxable gross receipts between $25,000,000.01 and $50,000,000
0.644% for taxable gross receipts between $50,000,000.01 and $75,000,000
0.644% for taxable gross receipts between $75,000,000.01 and $100,000,000
0.644% for taxable gross receipts between $100,000,000.01 and $150,000,000
0.644% for taxable gross receipts between $150,000,000.01 and $250,000,000
0.644% for taxable gross receipts between $250,000,000.01 and $500,000,000
0.644% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
0.644% for taxable gross receipts over $1,000,000,000
(b) “Category 2 Business Activities” means the business activities described in NAICS code 721 (Accommodation).
(c) The amount of taxable gross receipts from Category 2 Business Activities subject to the gross receipts tax shall be the total amount of gross receipts derived from or related to real properties located within the City.
(Added by Proposition M, 11/5/2024, Eff. 12/20/2024)
(a) The gross receipts tax rates applicable to Category 3 Business Activities are:
(1) For tax years 2025 and 2026:
0.413% for taxable gross receipts between $0 and $1,000,000
0.413% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.435% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.435% for taxable gross receipts between $25,000,000.01 and $50,000,000
0.435% for taxable gross receipts between $50,000,000.01 and $75,000,000
0.435% for taxable gross receipts between $75,000,000.01 and $100,000,000
0.435% for taxable gross receipts between $100,000,000.01 and $150,000,000
0.435% for taxable gross receipts between $150,000,000.01 and $250,000,000
0.435% for taxable gross receipts between $250,000,000.01 and $500,000,000
0.435% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
0.435% for taxable gross receipts over $1,000,000,000
(2) For tax year 2027:
0.43% for taxable gross receipts between $0 and $1,000,000
0.43% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.452% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.452% for taxable gross receipts between $25,000,000.01 and $50,000,000
0.465% for taxable gross receipts between $50,000,000.01 and $75,000,000
0.465% for taxable gross receipts between $75,000,000.01 and $100,000,000
0.465% for taxable gross receipts between $100,000,000.01 and $150,000,000
0.465% for taxable gross receipts between $150,000,000.01 and $250,000,000
0.465% for taxable gross receipts between $250,000,000.01 and $500,000,000
0.465% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
0.465% for taxable gross receipts over $1,000,000,000
(3) For tax years beginning on or after January 1, 2028:
0.442% for taxable gross receipts between $0 and $1,000,000
0.442% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.466% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.466% for taxable gross receipts between $25,000,000.01 and $50,000,000
0.489% for taxable gross receipts between $50,000,000.01 and $75,000,000
0.489% for taxable gross receipts between $75,000,000.01 and $100,000,000
0.489% for taxable gross receipts between $100,000,000.01 and $150,000,000
0.489% for taxable gross receipts between $150,000,000.01 and $250,000,000
0.489% for taxable gross receipts between $250,000,000.01 and $500,000,000
0.489% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
0.489% for taxable gross receipts over $1,000,000,000
(b) “Category 3 Business Activities” means one or more of the business activities described in NAICS codes 531 (Real Estate), 5612 (Facilities Support Services), 5617 (Services to Buildings and Dwellings), and 812930 (Parking Lots and Garages).
(c) The amount of taxable gross receipts from Category 3 Business Activities subject to the gross receipts tax shall be the total amount of gross receipts derived from or related to real properties located within the City.
(Added by Proposition M, 11/5/2024, Eff. 12/20/2024)
(a) The gross receipts tax rates applicable to Category 4 Business Activities are:
(1) For tax years 2025 and 2026:
0.25% for taxable gross receipts between $0 and $1,000,000
0.25% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.3% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.504% for taxable gross receipts between $25,000,000.01 and $50,000,000
0.84% for taxable gross receipts between $50,000,000.01 and $75,000,000
0.84% for taxable gross receipts between $75,000,000.01 and $100,000,000
1.176% for taxable gross receipts between $100,000,000.01 and $150,000,000
1.176% for taxable gross receipts between $150,000,000.01 and $250,000,000
1.344% for taxable gross receipts between $250,000,000.01 and $500,000,000
1.344% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
1.512% for taxable gross receipts over $1,000,000,000
(2) For tax year 2027:
0.26% for taxable gross receipts between $0 and $1,000,000
0.26% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.312% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.534% for taxable gross receipts between $25,000,000.01 and $50,000,000
0.89% for taxable gross receipts between $50,000,000.01 and $75,000,000
0.89% for taxable gross receipts between $75,000,000.01 and $100,000,000
1.246% for taxable gross receipts between $100,000,000.01 and $150,000,000
1.246% for taxable gross receipts between $150,000,000.01 and $250,000,000
1.424% for taxable gross receipts between $250,000,000.01 and $500,000,000
1.424% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
1.602% for taxable gross receipts over $1,000,000,000
(3) For tax years beginning on or after January 1, 2028:
0.268% for taxable gross receipts between $0 and $1,000,000
0.268% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.321% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.557% for taxable gross receipts between $25,000,000.01 and $50,000,000
0.929% for taxable gross receipts between $50,000,000.01 and $75,000,000
0.929% for taxable gross receipts between $75,000,000.01 and $100,000,000
1.301% for taxable gross receipts between $100,000,000.01 and $150,000,000
1.301% for taxable gross receipts between $150,000,000.01 and $250,000,000
1.486% for taxable gross receipts between $250,000,000.01 and $500,000,000
1.486% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
1.672% for taxable gross receipts over $1,000,000,000
(b) “Category 4 Business Activities” means one or more of the business activities described in NAICS codes 11 (Agriculture, Forestry, Fishing and Hunting), 21 (Mining, Quarrying, and Oil and Gas Extraction), 22 (Utilities), 31 through 33 (Manufacturing), 48 and 49 (Transportation and Warehousing), 524 (Insurance Carriers and Related Activities), 541714 (Research and Development in Biotechnology (except Nanobiotechnology)), 5611 (Office Administrative Services), 5613 (Employment Services), 5614 (Business Support Services), 5615 (Travel Arrangement and Reservation Services), 5616 (Investigation and Security Services), 5619 (Other Support Services), and 92 (Public Administration).
(Added by Proposition M, 11/5/2024, Eff. 12/20/2024)
(a) The gross receipts tax rates applicable to Category 5 Business Activities are:
(1) For tax years 2025 and 2026:
1% for taxable gross receipts between $0 and $1,000,000
1% for taxable gross receipts between $1,000,000.01 and $2,500,000
1.5% for taxable gross receipts between $2,500,000.01 and $25,000,000
1.176% for taxable gross receipts between $25,000,000.01 and $50,000,000
1.344% for taxable gross receipts between $50,000,000.01 and $75,000,000
1.344% for taxable gross receipts between $75,000,000.01 and $100,000,000
1.344% for taxable gross receipts between $100,000,000.01 and $150,000,000
1.512% for taxable gross receipts between $150,000,000.01 and $250,000,000
1.68% for taxable gross receipts between $250,000,000.01 and $500,000,000
1.68% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
1.68% for taxable gross receipts over $1,000,000,000
(2) For tax year 2027:
1.04% for taxable gross receipts between $0 and $1,000,000
1.04% for taxable gross receipts between $1,000,000.01 and $2,500,000
1.56% for taxable gross receipts between $2,500,000.01 and $25,000,000
1.246% for taxable gross receipts between $25,000,000.01 and $50,000,000
1.424% for taxable gross receipts between $50,000,000.01 and $75,000,000
1.424% for taxable gross receipts between $75,000,000.01 and $100,000,000
1.424% for taxable gross receipts between $100,000,000.01 and $150,000,000
1.602% for taxable gross receipts between $150,000,000.01 and $250,000,000
1.78% for taxable gross receipts between $250,000,000.01 and $500,000,000
1.78% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
1.78% for taxable gross receipts over $1,000,000,000
(3) For tax years beginning on or after January 1, 2028:
1.071% for taxable gross receipts between $0 and $1,000,000
1.071% for taxable gross receipts between $1,000,000.01 and $2,500,000
1.607% for taxable gross receipts between $2,500,000.01 and $25,000,000
1.301% for taxable gross receipts between $25,000,000.01 and $50,000,000
1.486% for taxable gross receipts between $50,000,000.01 and $75,000,000
1.486% for taxable gross receipts between $75,000,000.01 and $100,000,000
1.486% for taxable gross receipts between $100,000,000.01 and $150,000,000
1.672% for taxable gross receipts between $150,000,000.01 and $250,000,000
1.858% for taxable gross receipts between $250,000,000.01 and $500,000,000
1.858% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
1.858% for taxable gross receipts over $1,000,000,000
(b) “Category 5 Business Activities” means one or more of the business activities described in NAICS codes 51 (Information), 5222 (Nondepository Credit Intermediation), 5223 (Activities Related to Credit Intermediation)), 533 (Lessors of Nonfinancial Intangible Assets (except Copyrighted Works)), 54 (Professional, Scientific, and Technical Services) but not including 541714 (Research and Development in Biotechnology (except Nanobiotechnology)), 55 (Management of Companies and Enterprises), 562 (Waste Management and Remediation Services), 61 (Educational Services), 62 (Health Care and Social Assistance), and all business activities not otherwise exempt and not elsewhere subjected to a gross receipts tax rate by Sections 953.20 through 953.26 or an administrative office tax under Section 953.8.
(Added by Proposition M, 11/5/2024, Eff. 12/20/2024)
(a) The gross receipts tax rates applicable to Category 6 Business Activities are:
(1) For tax years 2025 and 2026:
1.5% for taxable gross receipts between $0 and $1,000,000
1.5% for taxable gross receipts between $1,000,000.01 and $2,500,000
3% for taxable gross receipts between $2,500,000.01 and $25,000,000
2.352% for taxable gross receipts between $25,000,000.01 and $50,000,000
3.024% for taxable gross receipts between $50,000,000.01 and $75,000,000
3.024% for taxable gross receipts between $75,000,000.01 and $100,000,000
3.36% for taxable gross receipts between $100,000,000.01 and $150,000,000
3.36% for taxable gross receipts between $150,000,000.01 and $250,000,000
3.36% for taxable gross receipts between $250,000,000.01 and $500,000,000
3.36% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
3.36% for taxable gross receipts over $1,000,000,000
(2) For tax year 2027:
1.56% for taxable gross receipts between $0 and $1,000,000
1.56% for taxable gross receipts between $1,000,000.01 and $2,500,000
3.12% for taxable gross receipts between $2,500,000.01 and $25,000,000
2.492% for taxable gross receipts between $25,000,000.01 and $50,000,000
3.204% for taxable gross receipts between $50,000,000.01 and $75,000,000
3.204% for taxable gross receipts between $75,000,000.01 and $100,000,000
3.56% for taxable gross receipts between $100,000,000.01 and $150,000,000
3.56% for taxable gross receipts between $150,000,000.01 and $250,000,000
3.56% for taxable gross receipts between $250,000,000.01 and $500,000,000
3.56% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
3.56% for taxable gross receipts over $1,000,000,000
(3) For tax years beginning on or after January 1, 2028:
1.607% for taxable gross receipts between $0 and $1,000,000
1.607% for taxable gross receipts between $1,000,000.01 and $2,500,000
3.214% for taxable gross receipts between $2,500,000.01 and $25,000,000
2.601% for taxable gross receipts between $25,000,000.01 and $50,000,000
3.344% for taxable gross receipts between $50,000,000.01 and $75,000,000
3.344% for taxable gross receipts between $75,000,000.01 and $100,000,000
3.716% for taxable gross receipts between $100,000,000.01 and $150,000,000
3.716% for taxable gross receipts between $150,000,000.01 and $250,000,000
3.716% for taxable gross receipts between $250,000,000.01 and $500,000,000
3.716% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
3.716% for taxable gross receipts over $1,000,000,000
(b) “Category 6 Business Activities” means one or more of the business activities described in NAICS codes 521 (Monetary Authorities-Central Bank), 5221 (Depository Credit Intermediation), 523 (Securities, Commodity Contracts, and Other Financial Investments and Related Activities), and 525 (Funds, Trusts, and other Financial Vehicles).
(Added by Proposition M, 11/5/2024, Eff. 12/20/2024)
(a) The gross receipts tax rates applicable to Category 7 Business Activities are:
(1) For tax years 2025 and 2026:
0.5% for taxable gross receipts between $0 and $1,000,000
0.5% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.75% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.672% for taxable gross receipts between $25,000,000.01 and $50,000,000
1.008% for taxable gross receipts between $50,000,000.01 and $75,000,000
1.008% for taxable gross receipts between $75,000,000.01 and $100,000,000
1.344% for taxable gross receipts between $100,000,000.01 and $150,000,000
1.344% for taxable gross receipts between $150,000,000.01 and $250,000,000
1.512% for taxable gross receipts between $250,000,000.01 and $500,000,000
1.512% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
1.68% for taxable gross receipts over $1,000,000,000
(2) For tax year 2027:
0.52% for taxable gross receipts between $0 and $1,000,000
0.52% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.78% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.712% for taxable gross receipts between $25,000,000.01 and $50,000,000
1.068% for taxable gross receipts between $50,000,000.01 and $75,000,000
1.068% for taxable gross receipts between $75,000,000.01 and $100,000,000
1.424% for taxable gross receipts between $100,000,000.01 and $150,000,000
1.424% for taxable gross receipts between $150,000,000.01 and $250,000,000
1.602% for taxable gross receipts between $250,000,000.01 and $500,000,000
1.602% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
1.78% for taxable gross receipts over $1,000,000,000
(3) For tax years beginning on or after January 1, 2028:
0.536% for taxable gross receipts between $0 and $1,000,000
0.536% for taxable gross receipts between $1,000,000.01 and $2,500,000
0.803% for taxable gross receipts between $2,500,000.01 and $25,000,000
0.743% for taxable gross receipts between $25,000,000.01 and $50,000,000
1.115% for taxable gross receipts between $50,000,000.01 and $75,000,000
1.115% for taxable gross receipts between $75,000,000.01 and $100,000,000
1.486% for taxable gross receipts between $100,000,000.01 and $150,000,000
1.486% for taxable gross receipts between $150,000,000.01 and $250,000,000
1.672% for taxable gross receipts between $250,000,000.01 and $500,000,000
1.672% for taxable gross receipts between $500,000,000.01 and $1,000,000,000
1.858% for taxable gross receipts over $1,000,000,000
(b) “Category 7 Business Activities” means the business activities described in NAICS code 23 (Construction).
(c) Except as otherwise provided in subsection (d), the amount of taxable gross receipts from Category 7 Business Activities subject to the gross receipts tax shall be the total amount of gross receipts derived from or related to real properties located within the City.
(d) The amount of taxable gross receipts determined under subsection (c) shall be reduced by any amounts that were included in a person or combined group’s gross receipts under subsection (c) and that the person or combined group paid to a subcontractor for work related to the real properties located with the City during the tax year. There shall be no deduction for any other costs, including without limitation costs for materials, fees, equipment, or other services. To claim such a deduction, a person must maintain an itemized schedule of payments to subcontractors.
(Added by Proposition M, 11/5/2024, Eff. 12/20/2024)
For tax years beginning on or after January 1, 2025, if a person, or a combined group as described in Section 956.3, derives gross receipts from more than one of Business Activity Categories 1 through 7, inclusive:
(a) If the person or combined group has $10,000 or less in gross receipts from any one of Business Activity Categories 1 through 7, inclusive, before allocating or apportioning gross receipts under Section 956, such person or combined group may combine those gross receipts for all purposes related to computing the gross receipts tax with the gross receipts from whichever of Business Activity Categories 1 through 7, inclusive, generated the most gross receipts for the person or combined group, before allocating or apportioning gross receipts under Section 956. If there is no Business Activity Category that generated the most gross receipts for the person or combined group because the person or combined group generated the same amount of gross receipts from one or more Business Activity Categories, then such person or combined group may combine the gross receipts in this subsection (a) for all purposes related to computing the gross receipts tax with the gross receipts from whichever Business Activity Category has the highest rates among the Business Activity Categories that generated the same amount of gross receipts.
(b) If the person or combined group continues to derive gross receipts from more than one of Business Activity Categories 1 through 7, inclusive, after applying subsection (a) of this Section 953.27, then such person or combined group shall separately compute the gross receipts tax for each Business Activity Category as provided in the Section applicable to that particular Business Activity Category as follows:
(2) The gross receipts tax liability for the person or combined group shall be the sum of the liabilities for each Business Activity Category.
(Added by Proposition M, 11/5/2024, Eff. 12/20/2024)
(a)
An organization that is exempt from income taxation by Chapter 4 (commencing with Section 23701) of Part 11 of Division 2 of the California Revenue and Taxation Code or Subchapter F (commencing with Section 501) of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986, as amended, as qualified by Sections 502, 503, 504, and 508 of the Internal Revenue Code of 1986, as amended, shall be exempt from taxation under this Article 12-A-1, only so long as those exemptions continue to exist under state or federal law.
(b) Gross receipts as defined in Section 952.3 shall not include receipts from business activities if, and only so long as and to the extent that, the City is prohibited from taxing such receipts under the Constitution or laws of the United States or under the Constitution or laws of the State of California.
(c) Rent Controlled Buildings Exclusion. A person subject to the tax may exclude from gross receipts in any tax year 50% of the total amount received from the rental of real property to tenants in occupancy at any location in the City, which is subject to limits on rent increases pursuant to the Residential Rent Stabilization and Arbitration Ordinance, Administrative Code, Chapter 37, Section 37.1 et seq.
(d) Exclusion of Certain Sales of Real Property. Gross receipts as defined in Section 952.3 shall not include receipts from any sales of real property with respect to which the Real Property Transfer Tax imposed by Article 12-C has been paid to the City.
(e) For only so long as and to the extent that the City is prohibited from imposing the tax under this Article 12-A-1, the following persons shall be exempt from the gross receipts tax:
(1) Banks and financial corporations exempt from local taxation under Article XIII, Section 27 of the California Constitution and Revenue and Taxation Code Section 23182;
(2) Insurance companies exempt from local taxation under Article XIII, Section 28 of the California Constitution;
(3) Persons engaging in business as a for-hire motor carrier of property under Revenue and Taxation Code Section 7233;
(4) Persons engaging in intercity transportation as a household goods carrier under Public Utilities Code Section 5327;
(5) Charter-party carriers operating limousines that are neither domiciled nor maintain a business office within the City under Public Utilities Code Section 5371.4; and
(6) Any person upon whom the City is prohibited under the Constitution or laws of the State of California from imposing the gross receipts tax.
(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)
(a) Notwithstanding any other provision of this Article 12-A-1, a “small business enterprise,” as hereinafter defined for purposes of this Article, shall be exempt from payment of the gross receipts tax, nevertheless, a small business enterprise shall pay the annual registration fee pursuant to Section 855 of Article 12.
(b) For purposes of this Article 12-A-1, the term “small business enterprise” shall mean:
(1) For tax years beginning on or after January 1, 2014 and ending on or before December 31, 2020, any person or combined group, except for a lessor of residential real estate, whose gross receipts within the City did not exceed $1,000,000, adjusted annually in accordance with the increase in the Consumer Price Index: All Urban Consumers for the San Francisco/Oakland/San Jose Area for All Items as reported by the United States Bureau of Labor Statistics, or any successor to that index, as of December 31 of the preceding year, beginning with December 31, 2014.
(2) For tax years beginning on or after January 1, 2021 and ending on or before December 31, 2024, any person or combined group, except for a lessor of residential real estate, whose gross receipts within the City did not exceed $2,000,000, adjusted annually in accordance with the increase in the Consumer Price Index: All Urban Consumers for the San Francisco/Oakland/San Jose Area for All Items as reported by the United States Bureau of Labor Statistics, or any successor to that index, as of December 31 of the preceding year, beginning with December 31, 2021.
(3) For tax years beginning on or after January 1, 2025, any person or combined group, except for a lessor of residential real estate, whose gross receipts within the City did not exceed $5,000,000, adjusted annually in accordance with the increase in the Consumer Price Index: All Urban Consumers for the San Francisco/Oakland/Hayward Area for All Items as reported by the United States Bureau of Labor Statistics, or any successor to that index, as of December 31 of the calendar year two years prior to the tax year, beginning with tax year 2026, and rounded to the nearest $10,000.
(c) For purposes of this Article 12-A-1, and notwithstanding any other provision of this Section 954.1, a lessor of residential real estate is a “small business enterprise” if and only if the lessor leases fewer than 4 units in any individual building. “Residential real estate” means real property where the primary use of or right to use the property is for the purpose of dwelling, sleeping or lodging other than as part of the business activity of accommodations. For purposes of this Article 12-A-1 and Article 12, a lessor of residential real estate is treated as a separate person with respect to each individual building in which it leases residential real estate units, notwithstanding Section 6.2-15 of Article 6, or Section 956.3 of this Article 12-A-1. The provisions of this subsection (c) apply only to leasing residential real estate units within a building, and not to any business activity related to other space, either within the same building or other buildings, which is not residential real estate. The Tax Collector is authorized to determine what constitutes a separate building and the number of units in a building.
(Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014; amended by Ord. 222-14
, File No. 140798, App. 11/7/2014, Eff. 12/7/2014; Ord. 10-18, File No. 171133, App. 2/1/2018, Eff. 3/4/2018; amended by Proposition F, 11/3/2020, Eff. 12/29/2020, Oper. 1/1/2021; Proposition M, 11/5/2024, Eff. 12/20/2024)
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