A Tenant’s Guide to San Francisco’s Proposition C

Under San Francisco’s Proposition C, there are two major changes to the City’s tax regime of which every business in the City should be aware:

1. The first tax under Prop C was passed by San Francisco voters on 5 June 2018, called the “San Francisco Commercial Rents Tax for Childcare and Early Education.” The measure imposes a 1% tax on gross receipts from the leasing of warehouse space. The measure also imposes a 3.5% tax on gross receipts from the leasing of commercial space, in addition to the City’s current Commercial Rents Tax. Both taxes mentioned above apply to commercial landlords with annual San Francisco gross receipts over $1.12 million.
   
   
2. The second tax under Prop C was passed by San Francisco voters on 6 November 2018, called the “San Francisco Gross Receipts Tax for Homelessness Services Initiative,” or HGRT (Homelessness Gross Receipts Tax). This measure imposes a tax between 0.175% and 0.69% on companies with SF gross receipts in excess of $50 million, in addition to the existing gross receipts tax framework (GRT). A 1.5% gross receipts tax applies to “administrative offices,” albeit based on the firm’s payroll expense attributable to the City.