Gross Receipts Tax Adjustment and Payroll Expense Tax rate
On August 28, 2015 the San Francisco Controller published the San Francisco Gross Receipts Tax Adjustment and Payroll Expense Tax rate for tax year 2015 (January 1 to December 31):
- The Gross Receipts Tax Adjustment will remain at 25% of the rate passed by voters.
- The 2015 Payroll Expense Tax rate is 1.162% (0.01162). This rate will be used to calculate the Payroll Expense Tax for the entire tax year 2015 when businesses file their annual tax return due February 29, 2016.
How does the rate change affect quarterly installment payments?
For businesses required to file and remit quarterly installment payments, the rate of 1.125% (0.01125) continues to be in effect for all quarterly installment payments, including the third quarter payment due on November 2, 2015. (Code section 6.9-3)
Will businesses be penalized if they file and remit 2015 quarterly installments at the 1.125% rate?
No. Businesses will not be penalized for remitting their 2015 quarterly installments at the 2015 quarterly installment rate of 1.125%, and do not need to remit additional quarterly payments to reflect the change in the 2015 payroll expense tax rate to 1.162%. The difference between the annual tax and the quarterly installment payments must be remitted with the annual filing due February 29, 2016. Businesses may also avoid penalties and interest by making installment payments that are 26% of their 2014 payroll expense tax liability and 26% of their 2014 gross receipts tax liability by the quarterly installment due dates.