The supervisors are discussing a November ballot initiative to revise the city's business tax. If voters approve this measure, it would add approximately $21 million to San Francisco's nearly $5 billion budget. This measure would have no effect on sales transactions that are under $1 million, which make up 85% of annual transactions. However, property owners that sell their commercial or residential sites would be subject to additional taxes of $7,500 for every $1 million of property that is sold.
The measure, which is sponsored by Supervisors Aaron Peskin, Tom Ammiano, Matt Gonzalez and Sophie Maxwell, would mostly affect the seller, as in San Francisco, the seller is responsible for the transfer tax. Still, according to city officials, in many transactions, the buyer and seller split the costs.
The four supervisors proceeded with their efforts to place the measure on November's ballot after a different proposal was rejected earlier this year. The foursome hopes that this measure will help boost the city's revenue and ease the financial strain of the budget.
However, many businesses have spoken out against the measure, saying that it is wrong to place the responsibility of fixing the city's financial problems on businesses. Others feel that taxing the rich is a better alternative than taxing the poor and middle class.
The Board of Supervisor is also weighing a new tax increase measure that would change the current payroll/business tax property owners pay to a 0.3% gross receipts tax. This measure would tax receipts on any "person engaging in business within the City as a lessor of real estate, if such lessor and/or building receives directly or indirectly, rents of any kind or character from another person for the right to occupy or use such premises, regardless of whether such occupancy or use is for residential or nonresidential purposes."
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