San Francisco County Municipal Code Art. 12 A-1

GROSS RECEIPTS TAX ORDINANCE Sec. 951. Short Title. Sec. 952. Definitions. Sec. 952.1. Advance Payment. Sec. 952.2. Cash Discount. Sec. 952.3. Gross Receipts. Sec. 952.4. NAICS Code. Sec. 952.5. Related Entity. Sec. 952.6. Sale and Sell. Sec. 953. Imposition of Gross Receipts Tax. Sec. 953.1. Gross Receipts Tax Applicable to Retail Trade; Wholesale Trade; and Certain Services. Sec. 953.2. Gross Receipts Tax Applicable to Manufacturing; Transportation and Warehousing; Information; Biotechnology; Clean Technology; and Food Services. Sec. 953.3. Gross Receipts Tax Applicable to Accommodations; Utilities; and Arts, Entertainment and Recreation. Sec. 953.4. Gross Receipts Tax Applicable to Private Education and Health Services; Administrative and Support Services; and Miscellaneous Business Activities. Sec. 953.5. Gross Receipts Tax Applicable to Construction. Sec. 953.6. Gross Receipts Tax Applicable to Financial Services; Insurance; and Professional, Scientific and Technical Services. Sec. 953.7. Gross Receipts Tax Applicable to Real Estate and Rental and Leasing Services. Sec. 953.8. Tax on Administrative Office Business Activities. Sec. 953.9. Persons or Combined Groups Engaged in Multiple Business Activities. Sec. 953.20. Gross Receipts Tax Applicable to Category 1 Business Activities. Sec. 953.21. Gross Receipts Tax Applicable to Category 2 Business Activities. Sec. 953.22. Gross Receipts Tax Applicable to Category 3 Business Activities. Sec. 953.23. Gross Receipts Tax Applicable to Category 4 Business Activities. Sec. 953.24. Gross Receipts Tax Applicable to Category 5 Business Activities.

Sec. 953.25. Gross Receipts Tax Applicable to Category 6 Business Activities. Sec. 953.26. Gross Receipts Tax Applicable to Category 7 Business Activities. Sec. 953.27. Persons or Combined Groups Engaged in Multiple Business Activity Categories. Sec. 954. Exemptions and Exclusions. Sec. 954.1. Small Business Exemption. Sec. 955. Persons Deriving No Gross Receipts from Business Activities Outside the City. Sec. 956. Allocation and Apportionment for All Persons Deriving Gross Receipts from Business Activities Both Within and Outside the City. Sec. 956.1. Allocation of Receipts from Real, Personal, Tangible and Intangible Property. Sec. 956.2. Apportionment of Receipts Based on Payroll. Sec. 956.3. Combined Returns. Sec. 957. Tax Collector Authorized to Determine Gross Receipts. Sec. 958. Administration of the Gross Receipts Tax Ordinance. Sec. 959. Election to Designate Tax to Small Business Rezoning Construction Relief Fund. Sec. 960. The "Payroll Expense Tax Exclusion" Credit. Sec. 960.1. Tax Credit for Opening a Physical Location in Designated Areas in the City. Sec. 960.2. Tax Credit for Stadium Operator Admission Taxes Paid. Sec. 960.3. Tax Credit for Supermarkets and Other Grocery Retailers. Sec. 960.4. Credit for First Lessees in Qualified Buildings. Sec. 962. Amendment of Ordinance. Sec. 963. Effect of State and Federal Authorization. Sec. 964. Severability. Sec. 965. Savings Clause. Sec. 966. Controller Reports.

SEC. 950. [REPEALED.] (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014; repealed by Proposition M, 11/5/2024, Eff. 12/20/2024) SEC. 951. SHORT TITLE. This Article shall be known as the "Gross Receipts Tax Ordinance" and the tax this Article imposes shall be known as the "Gross Receipts Tax." (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014) SEC. 952. DEFINITIONS. Except where the context otherwise requires, the terms used in this Article 12-A-1 shall have the meanings given to them in Sections 6.2-1 et seq. of Article 6. For purposes of this Article 12-A-1, “pass-through entity” includes a trust, partnership, corporation described in Subchapter S of the Internal Revenue Code of 1986, as amended, limited liability company, limited liability partnership, professional corporation, and any other person or entity (other than a disregarded entity for federal income tax purposes) which is not subject to the income tax imposed by Subtitle A, Chapter 1 of the Internal Revenue Code of 1986, as amended, or which is allowed a deduction in computing such tax for distributions to the owners or beneficiaries of such person or entity. (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)

"Advance payment" means a nonrefundable payment for the purchase of property or services to be delivered or performed in the future. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014)

"Cash discount" means a deduction from the invoice price of goods or charge for services which is allowed if the bill is paid on or before a specified date, or paid in cash rather than by credit card. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014)

(a) "Gross receipts" means the total amounts received or accrued by a person from whatever source derived, including, but not limited to, amounts derived from sales, services, dealings in property, interest, rent, royalties, dividends, licensing fees, other fees, commissions and distributed amounts from other business entities. Except as otherwise specifically provided in this Article, gross receipts includes but is not limited to all amounts that constitute gross income for federal income tax purposes. Except as otherwise specifically provided in this Article, gross receipts includes all receipts, cash, credits and property of any kind or nature and including any amount for which credit is allowed by the seller to the purchaser, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, losses or any other expense whatsoever, except that cash discounts allowed or taken on sales shall not be included as gross receipts. Gross receipts, including advance payments, shall be included in a taxpayer's gross receipts at the time such receipts are recognized as gross income for federal income tax reporting purposes. (b) "Gross receipts" with respect to any lease or rental shall include payment for any services that are part of the lease or rental, whether received in money or otherwise, that are paid to, on behalf of, or for the benefit of, the lessor, and all receipts, cash, credits, property of any kind or character and the fair market value of services so paid or rendered by the lessee. (c) Treatment of Taxes. "Gross receipts" shall not include the amount of any federal, state, or local tax imposed on or with respect to retail sales whether imposed upon the retailer or upon the purchaser and regardless of whether the amount of tax is stated as a separate charge, or such part of the sales price of any property previously sold and returned by the purchaser to the seller which is refunded by the seller by way of cash or credit allowances given or taken as part payment on any property so accepted for resale. Gross receipts shall also not include any federal, state or local tax imposed upon a person for which that person is reimbursed by means of a separately stated charge to a purchaser, lessee, licensee or customer. Gross receipts shall not include any amount of third-party taxes that a taxpayer collects from or on behalf of the taxpayer's customers and remits to the appropriate governmental entity imposing such tax. Gross receipts shall not include any tax refunds received by a person from a governmental entity. Gross receipts shall include any federal, state or local tax not specifically excluded in this subsection. (d) "Gross receipts" shall not include any amount received from or charged to any person that is a related entity to the taxpayer. Nor shall gross receipts include any grants received from governmental entities or any gifts. Gross receipts shall not include any investment receipts. "Investment receipts" includes interest, dividends, capital gains, other amounts received on account of financial instruments, and distributions from business entities, provided such items are directly derived exclusively from the investment of capital and not from the sale of property other than financial instruments, or from the provision of services, to any person. Gross receipts also shall not include any allocations of income or gain, or distributions (such as dividends, interest and other returns on capital) from an entity treated as a pass-through entity for federal income tax purposes, provided such allocations or distributions are derived exclusively from an investment in such entity, and not from any other property sold to, or services provided to, such entity. Any gross receipts of a pass- through entity which is subject to the gross receipts tax shall not also constitute gross receipts of any owner of that entity. (e) Notwithstanding the provisions of subsection (a), "gross receipts" from the sale or exchange of stocks or other similar written instruments evidencing a right to participate in the assets of any business, or of bonds or other evidence of indebtedness, or of any other marketable securities (collectively referred to in this Article as "financial instruments"), or of any real property, shall not include the cost to acquire the financial instrument(s), or real property, sold or otherwise exchanged or converted. Nor shall "gross receipts" include the amount received by the original issuer of a financial instrument in exchange for such issuance. To the extent that any loss on the sale or exchange of financial instruments reduces the gross income of a person for federal income tax purposes in the year the loss is incurred, that loss shall reduce gross receipts from the sale or exchange of financial instruments, but in no event shall those receipts be less than zero, and in no event may any such loss be carried back or carried forward to reduce gross receipts in a tax year other than that in which the loss was incurred. (f) No person shall be deemed to be engaging in business in the City if that person is an individual whose only gross receipts within the City are derived from investments of that individual's own funds in financial instruments. Gross receipts of an individual shall not include interest, dividends, capital gains and similar items or investment income earned from the investment of that individual's own capital. (g) For purposes of this Article and Article 12, and notwithstanding Section 6.2-12 of Article 6, no person shall be deemed to be engaging in business within the City if its activities in the City consist solely of one or more of the following: (1) contracting with, acting through, or otherwise using the services of, any investment advisor or affiliate thereof which is not a related entity;

(2) maintaining documents of formation, incorporation, or registration within the City; (3) being an owner, member, or other participant in an entity engaging in business within the City which is a pass-through entity for federal income tax purposes; or (4) having trustees or directors who meet or reside within the City. (h) (1) For tax years beginning on or after January 1, 2026, “gross receipts” shall not include amounts received by a Qualified Lessor. For purposes of this subsection (h), the term “Qualified Lessor” means a lessor of residential real estate, as the term residential real estate is described in Section 954.1(c) of this Article 12-A-1, if the lessor of residential real estate is a limited partnership in which the managing general partner is an eligible nonprofit corporation or eligible limited liability company, meeting all of the requirements of Section 214(g) of the California Revenue and Taxation Code. (2) The exclusion in this subsection (h) shall apply only with respect to the Qualified Lessor’s amounts received for its lease of residential real estate. The exclusion shall not apply to any amounts received from any business activity related to any other space, either within the same building or other buildings, that is not residential real estate. (3) For purposes of the exclusion in Section 952.3(d) of this Article 12-A-1 providing that “any gross receipts of a pass-through entity which is subject to the gross receipts tax shall not also constitute gross receipts of any owner of that entity,” a Qualified Lessor shall be deemed to be subject to the gross receipts tax notwithstanding the exclusion in this Section 952.3(h). (4) The Board of Supervisors may at any time, by ordinance, terminate the exclusion in this subsection (h) without such termination constituting a tax increase under Article XIIIC of the California Constitution. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014; amended by Ord. 209-25, File No. 250891, App. 10/31/2025, Eff. 12/1/2025)

“NAICS code” means the numerical classification for business activities established in the North American Industry Classification System used by federal governmental agencies to classify business establishments. References in Sections 953.1 through 953.7 of this Article 12-A-1 to particular numerical NAICS codes are intended to apply the definitions and descriptions adopted in that system as of December 15, 2012. References in Sections 953.20 through 953.26, 960.1, and 960.3 of this Article to particular numerical NAICS codes are intended to apply the definitions and descriptions adopted in that system as of January 1, 2022. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014; amended by Proposition M, 11/5/2024, Eff. 12/20/2024)

A person is a "related entity" to a taxpayer if that person and the taxpayer are permitted or required by the California Franchise Tax Board under Section 25102 et seq. of the California Revenue and Taxation Code, or any successor, to have their income reflected on the same combined report. For purposes of this Article, if two or more persons derive gross receipts solely from sources within California, and their business activities are such that, if conducted both within and outside California, a combined report would be required under the California Revenue and Taxation Code, or any successor, then those persons are related entities regardless of whether they file a combined report under the California Revenue and Taxation Code, or successor. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014)

"Sale" and "sell" mean the making of any transfer of title, in any manner or by any means whatsoever, to property for a price, and to the serving, supplying or furnishing, for a price, of any property fabricated or made at the special order of consumers who do or who do not furnish directly or indirectly the specifications or materials therefor. A transaction whereby the possession of property is transferred but the seller retains the title as a security for the payment of the price shall likewise be deemed a sale. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014) SEC. 953. IMPOSITION OF GROSS RECEIPTS TAX.

(a) Except as otherwise provided under this Article 12-A-1 , the City imposes and every person engaging in business within the City shall pay an annual gross receipts tax measured by the person's gross receipts from all taxable business activities attributable to the City. A person's liability for the gross receipts tax shall be calculated according to this Article 12-A-1. (b) The gross receipts tax is a privilege tax imposed upon persons engaging in business within the City for the privilege of engaging in a business or occupation in the City. The gross receipts tax is imposed for general governmental purposes. Proceeds from the tax shall be deposited in the City's general fund and may be expended for any purposes of the City. (c) The voters intend by adopting this measure to authorize application of the gross receipts tax in the broadest manner consistent with the provisions of this Article 12-A-1 and the requirements of the California Constitution, the United States Constitution, and any other applicable provision of federal and state law. (d) The tax on Administrative Office Business Activities imposed by Section 953.8 is intended as a complementary tax to the gross receipts tax, and shall be considered a gross receipts tax for purposes of this Article 12-A-1. (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)

WHOLESALE TRADE; AND CERTAIN SERVICES. (a) The gross receipts tax rates applicable to the business activities of retail trade, wholesale trade, and certain services are: (1) For tax years beginning on or after January 1, 2018 and ending on or before December 31, 2020: 0.075% (e.g., $0.75 per $1,000) for gross receipts between $0 and $1,000,000 0.1% (e.g., $1 per $1,000) for gross receipts between $1,000,001 and $2,500,000 0.135% (e.g., $1.35 per $1,000) for gross receipts between $2,500,001 and $25,000,000 0.16% (e.g., $1.60 per $1,000) for gross receipts over $25,000,000 (2) For the business activities of retail trade and certain services for tax years 2021 through and including 2024: 0.053% (e.g., $0.53 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.07% (e.g., $0.70 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.095% (e.g., $0.95 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.224% (e.g., $2.24 per $1,000) for taxable gross receipts over $25,000,000 (3) For the business activity of wholesale trade for tax years 2021 through and including 2024: 0.105% (e.g., $1.05 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.14% (e.g., $1.40 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.189% (e.g., $1.89 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.224% (e.g., $2.24 per $1,000) for taxable gross receipts over $25,000,000 (b) Retail trade includes the activity of retailing any type of personal property, generally without significantly transforming its characteristics, and rendering services incidental to the retail sale of property; it includes business activity described in NAICS codes 44 and 45. (c) Wholesale trade includes the activity of wholesaling property, generally without transformation, and rendering services incidental to the sale of property on a wholesale basis; it includes business activity described in NAICS code 42. (d) Certain services includes the repair and maintenance services, personal and laundry services, and religious, grantmaking, civic, professional and similar organizations that are not otherwise exempt; it includes business activity described in NAICS codes 811, 812 and 813. (e) The amount of gross receipts from retail trade activities and from wholesale trade activities subject to the gross receipts tax shall be one-half of the amount determined under Section 956.1 plus one-half of the amount determined under Section 956.2. (f) The amount of gross receipts from certain services activities subject to the gross receipts tax shall be the total amount determined under Section 956.2. (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; Ord. 152-21, File No. 210828, App. 9/29/2021, Eff. 10/30/2021; Ord. 151-23, File No. 230155, App. 7/28/2023, Eff. 8/28/2023, Retro. 1/1/2023; Proposition M, 11/5/2024, Eff. 12/20/2024)

TRANSPORTATION AND WAREHOUSING; INFORMATION; BIOTECHNOLOGY; CLEAN TECHNOLOGY; AND FOOD SERVICES. (a) The gross receipts tax rates applicable to the business activities of manufacturing, transportation and warehousing, information, biotechnology, clean technology, and food services are: (1) For tax years beginning on or after January 1, 2018 and ending on or before December 31, 2020: 0.125% (e.g., $1.25 per $1,000) for gross receipts between $0 and $1,000,000 0.205% (e.g., $2.05 per $1,000) for gross receipts between $1,000,001 and $2,500,000 0.37% (e.g., $3.70 per $1,000) for gross receipts between $2,500,001 and $25,000,000 0.475% (e.g., $4.75 per $1,000) for gross receipts over $25,000,000 (2) For the business activities of manufacturing and food services for tax years 2021 through and including 2024: 0.088% (e.g., $0.88 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.144% (e.g., $1.44 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.259% (e.g., $2.59 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.665% (e.g., $6.65 per $1,000) for taxable gross receipts over $25,000,000 (3) For the business activities of transportation and warehousing and clean technology for tax years 2021 through and including 2024: 0.175% (e.g., $1.75 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.287% (e.g., $2.87 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.518% (e.g., $5.18 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.665% (e.g., $6.65 per $1,000) for taxable gross receipts over $25,000,000 (4) For the business activity of biotechnology: (A) For tax year 2021: 0.175% (e.g., $1.75 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.287% (e.g., $2.87 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.518% (e.g., $5.18 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.665% (e.g., $6.65 per $1,000) for taxable gross receipts over $25,000,000 (B) For tax years 2022 and 2023: 0.181% (e.g., $1.81 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.297% (e.g., $2.97 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.537% (e.g., $5.37 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.689% (e.g., $6.89 per $1,000) for taxable gross receipts over $25,000,000 (C) For tax year 2024: 0.188% (e.g., $1.88 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.308% (e.g., $3.08 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.555% (e.g., $5.55 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.713% (e.g., $7.13 per $1,000) for taxable gross receipts over $25,000,000 (5) For the business activity of information: (A) For tax year 2021: 0.56% (e.g., $5.60 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.644% (e.g., $6.44 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000

0.714% (e.g., $7.14 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.784% (e.g., $7.84 per $1,000) for taxable gross receipts over $25,000,000 (B) For tax years 2022 and 2023: 0.573% (e.g., $5.73 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.665% (e.g., $6.65 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.751% (e.g., $7.51 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.832% (e.g., $8.32 per $1,000) for taxable gross receipts over $25,000,000 (C) For tax year 2024: 0.579% (e.g., $5.79 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.675% (e.g., $6.75 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.77% (e.g., $7.70 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.855% (e.g., $8.55 per $1,000) for taxable gross receipts over $25,000,000 (b) Manufacturing includes the activity of transforming materials, substances or components into new products by mechanical, physical or chemical means; it includes the activity of assembling component parts of manufactured products; it includes business activity described in NAICS codes 31, 32 and 33. (c) Transportation and warehousing includes the activities of providing transportation of passengers and/or goods, warehousing and storage for goods, scenic and sightseeing transportation, and support activities related to modes of transportation; it includes business activity described in NAICS codes 48 and 49. (d) Information includes producing and distributing information or cultural products; providing the means to transmit or distribute those products; and processing data; it includes business activity described in NAICS code 51. (e) For purposes of this Article 12-A-1: (1) Biotechnology includes the activity of conducting biotechnology research and experimental development, and operating laboratories for biotechnology research and experimental development, using DNA, cells, and/or bioprocessing techniques, as well as the application thereof to the development of therapeutics, diagnostic products and/or devices to improve human health, animal health, and agriculture. For purposes of this Section 953.2(e)(1): (A) “DNA” is a nucleic acid sequence, or fragment thereof, that contains the genetic information for cell growth, division, and function. Examples of DNA include recombinant DNA, RNA, mRNA, antisense, RNAi, genes and ESTs. (B) “Cells” are membrane bound structures containing biomolecules, such as nucleic acids, proteins, and polysaccharides. This definition includes both prokaryotic (bacterial) and eukaryotic (animal or plant) cells. Examples include primary cells, transformed or cultured cells, stem cells, iPS, ESCs, fused cells and cell lines. (C) “Bioprocessing” is the use of microbial, plant, or animal cells or portions thereof, for the production of therapeutics or diagnostics. Bioprocessing includes the extraction of compounds from biomaterials; reaction of biomaterials, such as microbial fermentation, cell culture, cell fusion or biotransformation by enzymes; and separation of product from biomaterials using filtration, purification, precipitation, centrifugation, solvents, chromatography or other means. (2) Clean technology includes the activity of a business, as defined in Section 6.2-5 of Article 6 of the Business and Tax Regulations Code, in which at least 75% of all business activities carried on during the tax year are directly related to one or more of the following activities: (A) Research and development and/or associated manufacturing applying scientific advances to the production, distribution or storage of clean energy. (B) Research and development and/or associated manufacturing applying scientific advances to prototype or commercially viable materials and products powered by clean energy, including but not limited to single passenger vehicles and fueling infrastructure. (C) Research and development and/or associated manufacturing applying scientific advances to prototype or commercially viable techniques, materials and products that materially improve energy efficiency, water conservation or air quality. (D) Research and development, manufacture and/or installation of solar panels. (3) For purposes of Section 953.2(e)(2), “clean energy” means energy utilizing energy produced by wind, solar energy, landfill gas, geothermal resources, ocean thermal energy conversion, quantifiable energy conservation measures, tidal energy, wave energy, biomass, biofuels, or hydrogen fuels derived from renewable sources, excluding: (A) any fossil fuel based energy production, including but not limited to, clean coal, clean diesel, natural gas and hydrogen from natural gas; (B) any nuclear based energy production; (C) waste to energy via combustion or incineration; or/and

(D) other technologies that are detrimental to human health. (f) Food services includes the activity of preparing meals, snacks and/or beverages to customer order for immediate on-premises or off-premises consumption; it includes drinking places; it includes business activity described in NAICS code 722. (g) The amount of gross receipts from all business activities described in this Section subject to the gross receipts tax shall be one-half of the amount determined under Section 956.1 plus one-half of the amount determined under Section 956.2. (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; Ord. 152-21, File No. 210828, App. 9/29/2021, Eff. 10/30/2021; Ord. 151-23, File No. 230155, App. 7/28/2023, Eff. 8/28/2023, Retro. 1/1/2023; Proposition M, 11/5/2024, Eff. 12/20/2024)

ACCOMMODATIONS; UTILITIES; AND ARTS, ENTERTAINMENT AND RECREATION. (a) The gross receipts tax rates applicable to the business activities of accommodations; utilities; and arts, entertainment and recreation are: (1) For tax years beginning on or after January 1, 2018 and ending on or before December 31, 2020: 0.3% (e.g., $3 per $1,000) for gross receipts between $0 and $1,000,000 0.325% (e.g., $3.25 per $1,000) for gross receipts between $1,000,001 and $2,500,000 0.325% (e.g., $3.25 per $1,000) for gross receipts between $2,500,001 and $25,000,000 0.4% (e.g., $4 per $1,000) for gross receipts over $25,000,000 (2) For the business activities of accommodations and arts, entertainment and recreation for tax years 2021 through and including 2024: 0.21% (e.g., $2.10 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.228% (e.g., $2.28 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.228% (e.g., $2.28 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.56% (e.g., $5.60 per $1,000) for taxable gross receipts over $25,000,000 (3) For the business activity of utilities: (A) For tax year 2021: 0.42% (e.g., $4.20 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.455% (e.g., $4.55 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.455% (e.g., $4.55 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.56% (e.g., $5.60 per $1,000) for taxable gross receipts over $25,000,000 (B) For tax years 2022 and 2023: 0.435% (e.g., $4.35 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.471% (e.g., $4.71 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.471% (e.g., $4.71 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.58% (e.g., $5.80 per $1,000) for taxable gross receipts over $25,000,000 (C) For tax year 2024: 0.45% (e.g., $4.50 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.488% (e.g., $4.88 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.488% (e.g., $4.88 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.6% (e.g., $6 per $1,000) for taxable gross receipts over $25,000,000 (b) Accommodations includes the activity of providing lodging or short-term accommodations for travelers, vacationers, or others; it includes business activity described in NAICS code 721. (c) Utilities includes the activities of the generation, transmission and distribution of electric power, the distribution of natural gas, the

provision and distribution of steam supply, the treatment and distribution of water supply, and the removal of sewage; it includes business activity described in NAICS code 22; it excludes establishments primarily engaged in waste management services. (d) Arts, entertainment and recreation include the activity of operating facilities or providing services to meet cultural, entertainment or recreational interests of customers or patrons; it includes business activity described in NAICS code 71. (e) The amount of gross receipts and from accommodations subject to the gross receipts tax shall be the total amount of gross receipts derived from or related to properties located or used within the City. (f) The amount of gross receipts from utilities subject to the gross receipts tax shall be one-half of the amount determined under Section 956.1 plus one-half of the amount determined under Section 956.2. (g) The amount of gross receipts from arts, entertainment and recreation subject to the gross receipts tax shall be the total amount determined under Section 956.2. (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; Ord. 152-21, File No. 210828, App. 9/29/2021, Eff. 10/30/2021; Ord. 151-23, File No. 230155, App. 7/28/2023, Eff. 8/28/2023, Retro. 1/1/2023; Proposition M, 11/5/2024, Eff. 12/20/2024)

EDUCATION AND HEALTH SERVICES; ADMINISTRATIVE AND SUPPORT SERVICES; AND MISCELLANEOUS BUSINESS ACTIVITIES. (a) The gross receipts tax rates applicable to the business activities of private education and health services, administrative and support services, and all business activities not otherwise exempt and not elsewhere subjected to a gross receipts tax rate or an administrative office tax by this Article 12-A-1 are: (1) For tax years beginning on or after January 1, 2018 and ending on or before December 31, 2020: 0.525% (e.g., $5.25 per $1,000) for gross receipts between $0 and $1,000,000 0.55% (e.g., $5.50 per $1,000) for gross receipts between $1,000,001 and $2,500,000 0.6% (e.g., $6 per $1,000) for gross receipts between $2,500,001 and $25,000,000 0.65% (e.g., $6.50 per $1,000) for gross receipts over $25,000,000 (2) For the business activities of private education and health services and administrative and support services: (A) For tax year 2021: 0.735% (e.g., $7.35 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.77% (e.g., $7.70 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.84% (e.g., $8.40 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.91% (e.g., $9.10 per $1,000) for taxable gross receipts over $25,000,000 (B) For tax years 2022 and 2023: 0.761% (e.g., $7.61 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.798% (e.g., $7.98 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.87% (e.g., $8.70 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.943% (e.g., $9.43 per $1,000) for taxable gross receipts over $25,000,000 (C) For tax year 2024: 0.788% (e.g., $7.88 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.825% (e.g., $8.25 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.9% (e.g., $9 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.975% (e.g., $9.75 per $1,000) for taxable gross receipts over $25,000,000 (3) For all business activities not otherwise exempt and not elsewhere subjected to a gross receipts tax rate or an administrative office tax by this Article 12-A-1: (A) For tax year 2021: 0.735% (e.g., $7.35 per $1,000) for taxable gross receipts between $0 and $1,000,000

0.77% (e.g., $7.70 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.84% (e.g., $8.40 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.91% (e.g., $9.10 per $1,000) for taxable gross receipts over $25,000,000 (B) For tax years 2022 and 2023: 0.788% (e.g., $7.88 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.825% (e.g., $8.25 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.9% (e.g., $9 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.975% (e.g., $9.75 per $1,000) for taxable gross receipts over $25,000,000 (C) For tax year 2024: 0.814% (e.g., $8.14 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.853% (e.g., $8.53 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.93% (e.g., $9.30 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 1.008% (e.g., $10.08 per $1,000) for taxable gross receipts over $25,000,000 (b) Private education and health services include the activity by persons other than governmental agencies of providing instruction and training in any subject, or of providing health care or social assistance for individuals; it includes business activity described in NAICS codes 61 and 62. (c) Administrative and support services includes the activity of performing routine support activities for the day-to-day business activities of others; it includes business activity described in NAICS code 56. (d) The amount of gross receipts from all business activities described in this Section subject to the gross receipts tax shall be determined under Section 956.2. (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; Ord. 152-21, File No. 210828, App. 9/29/2021, Eff. 10/30/2021; Proposition M, 11/5/2024, Eff. 12/20/2024)

(a) The gross receipts tax rates applicable to the business activity of construction are: (1) For tax years beginning on or after January 1, 2018 and ending on or before December 31, 2020: 0.3% (e.g., $3 per $1,000) for gross receipts between $0 and $1,000,000 0.35% (e.g., $3.50 per $1,000) for gross receipts between $1,000,001 and $2,500,000 0.4% (e.g., $4 per $1,000) for gross receipts between $2,500,001 and $25,000,000 0.45% (e.g., $4.50 per $1,000) for gross receipts over $25,000,000 (2) For tax years 2021 through and including 2024: 0.42% (e.g., $4.20 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.49% (e.g., $4.90 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.56% (e.g., $5.60 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.63% (e.g., $6.30 per $1,000) for taxable gross receipts over $25,000,000 (b) Construction includes the activity of preparing sites for, subdividing land for, or working on, buildings or engineering projects (including highways and utility systems); it includes business activity described in NAICS code 23. (c) The amount of gross receipts from construction subject to the gross receipts tax shall be one-half of the amount determined under Section 956.1 plus one-half of the amount determined under Section 956.2. The amount of gross receipts so determined shall then be reduced by any amounts which were included in a person's gross receipts within the City pursuant to Section 956.1, and which that person paid to a subcontractor possessing a valid business registration certificate with the City during the tax year. There shall be no reduction for any other costs, including without limitation costs for materials, fees, equipment, or other services. In order to claim such a reduction, a person must maintain an itemized schedule of payments to subcontractors and information sufficient to enable the Tax Collector to verify that the subcontractor possessed a valid business registration certificate with the City. (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; Ord. 152-21, File No. 210828, App. 9/29/2021, Eff. 10/30/2021; Proposition M, 11/5/2024, Eff. 12/20/2024)

SERVICES; INSURANCE; AND PROFESSIONAL, SCIENTIFIC AND TECHNICAL SERVICES. (a) The gross receipts tax rates applicable to the business activities of financial services; insurance; and professional, scientific and technical services are: (1) For tax years beginning on or after January 1, 2018 and ending on or before December 31, 2020: 0.4% (e.g., $4 per $1,000) for gross receipts between $0 and $1,000,000 0.46% (e.g., $4.60 per $1,000) for gross receipts between $1,000,001 and $2,500,000 0.51% (e.g., $5.10 per $1,000) for gross receipts between $2,500,001 and $25,000,000 0.56% (e.g., $5.60 per $1,000) for gross receipts over $25,000,000 (2) For the business activity of insurance: (A) For tax year 2021: 0.56% (e.g., $5.60 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.644% (e.g., $6.44 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.714% (e.g., $7.14 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.784% (e.g., $7.84 per $1,000) for taxable gross receipts over $25,000,000 (B) For tax years 2022 and 2023: 0.58% (e.g., $5.80 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.667% (e.g., $6.67 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.74% (e.g., $7.40 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.812% (e.g., $8.12 per $1,000) for taxable gross receipts over $25,000,000 (C) For tax year 2024: 0.6% (e.g., $6 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.69% (e.g., $6.90 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.765% (e.g., $7.65 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.84% (e.g., $8.40 per $1,000) for taxable gross receipts over $25,000,000 (3) For the business activities of financial services and professional, scientific and technical services: (A) For tax year 2021: 0.56% (e.g., $5.60 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.644% (e.g., $6.44 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.714% (e.g., $7.14 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.784% (e.g., $7.84 per $1,000) for taxable gross receipts over $25,000,000 (B) For tax years 2022 and 2023: 0.6% (e.g., $6 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.69% (e.g., $6.90 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.765% (e.g., $7.65 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.84% (e.g., $8.40 per $1,000) for taxable gross receipts over $25,000,000 (C) For tax year 2024: 0.62% (e.g., $6.20 per $1,000) for taxable gross receipts between $0 and $1,000,000

0.713% (e.g., $7.13 per $1,000) for taxable gross receipts between $1,000,000.01 and $2,500,000 0.791% (e.g., $7.91 per $1,000) for taxable gross receipts between $2,500,000.01 and $25,000,000 0.868% (e.g., $8.68 per $1,000) for taxable gross receipts over $25,000,000 (b) Financial services includes the activities of engaging in or facilitating financial transactions; it includes business activities described in NAICS codes 521, 522 and 523. (c) Insurance includes the activities of facilitating or supporting the pooling of risk by underwriting insurance and annuities; the activities covered by this Section include those of persons not exempt from the gross receipts tax based on business activities described in NAICS code 524. (d) Professional, scientific and technical services includes the activity of providing for others, specialized professional, scientific, or technical services that require a high degree of expertise and training; it includes business activity described in NAICS code 54. (e) The amount of gross receipts from the activities described in this Section subject to the gross receipts tax shall be the amount determined under Section 956.2. (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; Ord. 152-21, File No. 210828, App. 9/29/2021, Eff. 10/30/2021; Proposition M, 11/5/2024, Eff. 12/20/2024)

RENTAL AND LEASING SERVICES. (a) The gross receipts tax rates applicable to the business activities of real estate and rental and leasing services are: (1) For tax years beginning on or after January 1, 2018 and ending on or before December 31, 2020: 0.285% (e.g., $2.85 per $1,000) for gross receipts between $0 and $1,000,000 0.285% (e.g., $2.85 per $1,000) for gross receipts between $1,000,001 and $5,000,000 0.3% (e.g., $3.00 per $1,000) for gross receipts between $5,000,001 and $25,000,000 0.3% (e.g., $3.00 per $1,000) for gross receipts over $25,000,000 (2) For tax year 2021: 0.399% (e.g., $3.99 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.399% (e.g., $3.99 per $1,000) for taxable gross receipts between $1,000,000.01 and $5,000,000 0.42% (e.g., $4.20 per $1,000) for taxable gross receipts between $5,000,000.01 and $25,000,000 0.42% (e.g., $4.20 per $1,000) for taxable gross receipts over $25,000,000 (3) For tax years 2022 and 2023: 0.413% (e.g., $4.13 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.413% (e.g., $4.13 per $1,000) for taxable gross receipts between $1,000,000.01 and $5,000,000 0.435% (e.g., $4.35 per $1,000) for taxable gross receipts between $5,000,000.01 and $25,000,000 0.435% (e.g., $4.35 per $1,000) for taxable gross receipts over $25,000,000 (4) For tax year 2024: 0.428% (e.g., $4.28 per $1,000) for taxable gross receipts between $0 and $1,000,000 0.428% (e.g., $4.28 per $1,000) for taxable gross receipts between $1,000,000.01 and $5,000,000 0.45% (e.g., $4.50 per $1,000) for taxable gross receipts between $5,000,000.01 and $25,000,000 0.45% (e.g., $4.50 per $1,000) for taxable gross receipts over $25,000,000 (b) Real estate and rental and leasing services includes the activities of renting, leasing, or otherwise allowing the use of tangible or intangible assets, and the activity of providing related services; it includes business activity described in NAICS code 53. (c) The amount of gross receipts from real estate and rental and leasing services subject to the gross receipts tax shall be the total amount of gross receipts derived from or related to properties located or used within the City. Gross receipts shall not include amounts derived from or related to properties located or used outside the City. (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; Ord. 152-21, File No. 210828, App. 9/29/2021, Eff. 10/30/2021; Proposition M, 11/5/2024, Eff. 12/20/2024)

(a) Except as provided in this Section 953.8, notwithstanding any other provision of this Article 12-A-1 and in lieu of the other taxes provided by this Article for any person or combined group, every person engaging in business within the City as an administrative office, as defined below, shall pay an annual administrative office tax measured by its total payroll expense that is attributable to the City. If a person is a member of a combined group, then its tax shall be measured by the total payroll expense of the combined group attributable to the City. Such combined group shall pay only the administrative office tax. The administrative office tax rate is: (1) For tax years beginning on or after January 1, 2014 and ending on or before December 31, 2021: 1.4%. (2) For tax years 2022 and 2023: 1.47%. (3) For tax year 2024: 1.54%. (4) For tax years 2025 and 2026: 1.47%. (5) For tax year 2027: 1.59%. (6) For tax years beginning on or after January 1, 2028: 1.68% (b) Administrative Office Business Activity. (1) “Engaging in business within the City as an administrative office” means that: (A) a person is engaging in business within the City during the tax year and over 50% of the total combined payroll expense within the City of that person and its related entities for the tax year was associated with providing administrative or management services exclusively to that person or related entities; (B) the total combined number of employees of that person and its related entities within the United States as of the last day of the tax year exceeded 1,000; and (C) the total combined gross receipts of that person and its related entities reported on United States federal income tax return(s) for the tax year exceeded $1,000,000,000. (2) For tax years beginning on or after January 1, 2025: (A) For a person or combined group’s classification as engaging in business within the City as an administrative office to change from one tax year to the next, the person or combined group must fail to satisfy at least one of the conditions in subsections (A), (B), and (C) of subsection (b)(1) for the current tax year and the immediately preceding two tax years. (B) For a person or combined group’s classification as not engaging in business within the City as an administrative office to change from one tax year to the next, the person or combined group must satisfy all three of the conditions in subsections (A), (B), and (C) of subsection (b)(1) for the current tax year and the immediately preceding two tax years. (c) For purposes of subsection (b) only, a related entity shall include any person who could be included in the same combined report under California Revenue and Taxation Code Section 25102 but for the existence of a water's edge election under Section 25110 of that Code. (d) "Administrative or management services" comprises internal support services provided on an enterprise-wide basis, such as executive office oversight, company business strategy, recordkeeping, risk management, personnel administration, legal, accounting, market research and analysis, and training services; it does not include sales personnel or personnel actively engaged in marketing, research and development, direct customer service, and product support services. The Tax Collector is authorized to classify in its reasonable discretion which personnel employed by any person provide administrative or management services. (e) A person provides administrative office services exclusively for itself or a related entity only if the final recipient of those services is at a location where that person or a related entity conducts business activities. (f) “Payroll expense” for purposes of this Section 953.8 means the compensation paid to, on behalf of, or for the benefit of an individual, including shareholders of a professional corporation or a Limited Liability Company (“LLC”), including salaries, wages, bonuses, commissions, property issued or transferred in exchange for the performance of services (including but not limited to stock options), compensation for services to owners of pass-through entities, and any other form of compensation, who during any tax year, perform work or render services, in whole or in part in the City; and if more than one individual or shareholders of a professional corporation or members of an LLC, during any tax year performs work or renders services in whole or in part in the City, the term “Payroll Expense” means the total compensation paid including salaries, wages, bonuses, commissions, property issued or transferred in exchange for the performance of services (including but not limited to stock options), in addition to any compensation for services to owners of pass-through entities, and any other form of compensation for services, to all such individuals and shareholders of a professional corporation or members of an LLC. For purposes of this definition of payroll expense: (1) Any person that grants a service provider a right to acquire an ownership interest in such person in exchange for the performance of services shall include in its payroll expense for the tax year in which such right is exercised an amount equal to the excess of (A) the

fair market value of such ownership interest on the date such right is exercised over (B) the price paid for such interest. This Section 953.8(f)(1) shall not apply for purposes of determining whether a person is engaging in business within the City as an administrative office, but shall apply for all other purposes of this Section 953.8. (2) Any individual compensated in his or her capacity as a real estate salesperson or mortgage processor shall be deemed an employee of the real estate broker or mortgage broker for or under whom such individual performs services, and any compensation received by such individual, including compensation by way of commissions, shall be included in the payroll expense of such broker. For purposes of this Section 953.8(f), “real estate broker” and “mortgage broker” refer to any individual licensed as such under the laws of the State of California who engages the services of salespersons or a salesperson, or of mortgage processors or a mortgage processor, to perform services in the business which such broker conducts under the authority of his or her license; a “salesperson” is an individual who is engaged by a real estate broker to perform services, which may be continuous in nature, as a real estate salesperson under an agreement with a real estate broker, regardless of whether the individual is licensed as a real estate broker under the laws of the State of California; a “mortgage processor” is an individual who is engaged by a real estate broker or mortgage broker to perform services, which may be continuous in nature, as a mortgage processor under an agreement with such real estate broker or mortgage broker, regardless of whether the mortgage processor is also licensed as a mortgage broker under the laws of the State of California. (3) All compensation, including all pass-through compensation for services paid to, on behalf of, or for the benefit of owners of a pass-through entity, shall be included in the calculation of such entity’s payroll expense tax base for purposes of determining such entity’s tax liability under this Section 953.8. For purposes of this Section 953.8(f), the “pass-through compensation for services” of a pass-through entity shall be the aggregate compensation paid by such entity for personal services rendered by all such owners, and shall not include any return on capital investment. The taxpayer may calculate the amount of compensation to owners of the entity subject to the administrative office tax in this Section 953.8, or the taxpayer may presume that, in addition to amounts reported on a W-2 form, the amount subject to the administrative office tax is, for each owner, an amount that is 200% of the average annual compensation paid to, on behalf of, or for the benefit of the employees of the pass-through entity whose compensation is in the top quartile (i.e., 25%) of the entity’s employees who are based in the City; provided, the total number of employees of the entity based in the City is not less than four. (4) Where payroll expense is incurred by reason of work performed or services rendered by an individual wholly within the City, all of the payroll expense for such individual shall be attributable to the City and subject to tax under this Section 953.8. Where payroll expense is incurred by reason of work performed or services rendered by an individual partly within and partly without the City, the portion of such payroll expense attributable to the City (and subject to tax under this Section) shall be determined as follows: (A) Except as otherwise provided in this Section 953.8(f)(4), the portion of such payroll expense attributable to the City shall be the portion of such payroll expense which the total number of working hours employed within the City bears to the total number of working hours within and without the City. (B) If the amount of such payroll expense depends on the volume of business transacted by such individual, then the portion of such payroll expense attributable to the City shall be the portion of such payroll expense which the volume of business transacted by such individual in the City bears to the volume of business transacted by such individual within and without the City. (C) If it is impracticable, unreasonable or improper to apportion such payroll expenses as aforesaid either because of the particular nature of the services of such individual, or on account of the unusual basis of compensation, or for any other reason, then the amount of such payroll earnings reasonably attributable to work performed or services rendered in the City shall be determined on the basis of all relevant facts and circumstances of the particular case, in accordance with any rulings or regulations issued or promulgated by the Tax Collector for the purpose. (D) If the Tax Collector determines that the percentage of payroll expenses attributable to the City, for any one or more persons, is a relatively stable percentage, the Tax Collector may establish that percentage as a prima facie evidence of payroll expense attributable to the City; provided, that the Tax Collector shall condition the establishment of such fixed percentage upon the obligation of the taxpayer to report immediately to the Tax Collector any significant change in the taxpayer’s mode of business which may impact the portion of the person’s payroll expense which is attributable to the City; and, provided further, that the Tax Collector may rescind any such fixed percentage at any time by providing written notice to the taxpayer of such rescission. (g) In addition to the administrative office tax provided in subsection (a), any person engaging in business within the City as an administrative office exclusively for itself or a related entity shall apply for a registration certificate and pay a registration fee, as provided in Article 12. (h) Except as provided in this Section, the pr

ritten notice to the taxpayer of such rescission. (g) In addition to the administrative office tax provided in subsection (a), any person engaging in business within the City as an administrative office exclusively for itself or a related entity shall apply for a registration certificate and pay a registration fee, as provided in Article 12. (h) Except as provided in this Section, the provisions of Article 6 and Article 12 apply to the administrative office tax. In particular, and without limiting the applicability of the balance of Article 6, the provisions of Sections 6.9-1 through 6.9-3, inclusive, of Article 6, regarding due dates, returns and prepayments, apply to the administrative office 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; Ord. 152-21, File No. 210828, App. 9/29/2021, Eff. 10/30/2021; Proposition M, 11/5/2024, Eff. 12/20/2024)

BUSINESS ACTIVITIES. 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; (2) the small business exemption provided in Section 954.1 shall apply only if the sum of receipts within the City from all sets of business activities does not exceed the applicable threshold in Section 954.1 in total; (3) the progressive rates described in Sections 953.1 through 953.7, and the subsections within those Sections, apply on an aggregate basis for businesses with multiple sets of activities; (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)

BUSINESS ACTIVITIES. (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). (c) The amount of taxable gross receipts from Category 1 Business Activities subject to the gross receipts tax shall be three-quarters of the amount determined under Section 956.1 plus one-quarter of the amount determined under Section 956.2. (Added by Proposition M, 11/5/2024, Eff. 12/20/2024)

BUSINESS ACTIVITIES. (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 0.201% 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 0.209% 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 0.215% 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; amended by Ord. 214-24, File No. 240698, App. 8/8/2024, Eff. 9/8/2024, Oper. 12/20/2024)

BUSINESS ACTIVITIES.

(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)

BUSINESS ACTIVITIES. (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: (1) For tax year 2025, 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). (2) For tax year 2026 and subsequent tax years, 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), 517 (Telecommunications), 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). (c) The amount of taxable gross receipts from Category 4 Business Activities subject to the gross receipts tax shall be three-quarters of the amount determined under Section 956.1 plus one-quarter of the amount determined under Section 956.2. (Added by Proposition M, 11/5/2024, Eff. 12/20/2024; amended by Ord. 187-25, File No. 250576, App. 10/6/2025, Eff. 11/6/2025)

BUSINESS ACTIVITIES. (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: (1) For tax year 2025, 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. (2) For tax year 2026 and subsequent tax years, one or more of the business activities described in NAICS codes 51 (Information) but not 517 (Telecommunications), 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. (c) The amount of taxable gross receipts from Category 5 Business Activities subject to the gross receipts tax shall be three-quarters of the amount determined under Section 956.1 plus one-quarter of the amount determined under Section 956.2. (Added by Proposition M, 11/5/2024, Eff. 12/20/2024; amended by Ord. 187-25, File No. 250576, App. 10/6/2025, Eff. 11/6/2025)

BUSINESS ACTIVITIES. (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). (c) The amount of taxable gross receipts from Category 6 Business Activities subject to the gross receipts tax shall be three-quarters of the amount determined under Section 956.1 plus one-quarter of the amount determined under Section 956.2. (Added by Proposition M, 11/5/2024, Eff. 12/20/2024)

BUSINESS ACTIVITIES. (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)

MULTIPLE BUSINESS ACTIVITY CATEGORIES. 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: (1) The small business exemption provided in Section 954.1 shall apply only if the sum of receipts within the City from all Business Activity Categories does not exceed the applicable threshold in Section 954.1 in total; and (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) SEC. 954. EXEMPTIONS AND EXCLUSIONS. (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) SEC. 955. PERSONS DERIVING NO GROSS RECEIPTS FROM BUSINESS ACTIVITIES OUTSIDE THE CITY. Notwithstanding any other provision of this Article, any person subject to the gross receipts tax who derives non-exempt gross receipts from business activities within the City and derives no gross receipts from business activities outside the City is subject to tax on all non- exempt gross receipts. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014) SEC. 956. ALLOCATION AND APPORTIONMENT FOR ALL PERSONS DERIVING GROSS RECEIPTS FROM BUSINESS ACTIVITIES BOTH WITHIN AND OUTSIDE THE CITY. All persons deriving gross receipts from business activities both within and outside the City shall allocate and/or apportion their gross receipts to the City as follows: (a) for taxable years ending on or before December 31, 2024, using the rules set forth in Sections 956.1 and 956.2, in the manner directed in Sections 953.1 through 953.7, inclusive, and in Section 953.9 of this Article 12-A-1; and (b) for taxable years beginning on or after January 1, 2025, in the manner directed in Sections 953.20 through 953.26, inclusive, and using the rules set forth in Sections 956.1 and 956.2, as applicable. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014; amended by Proposition M, 11/5/2024, Eff. 12/20/2024)

TANGIBLE AND INTANGIBLE PROPERTY. (a) For all persons required to determine an amount of gross receipts pursuant to this Section 956.1, that amount shall be all non- exempt gross receipts within the City as determined hereunder.

(b) Gross receipts from the sale, lease, rental, or licensing of real property are in the City if the real property is located in the City. (c) Gross receipts from sales of tangible personal property are in the City if the property is delivered or shipped to a purchaser within the City regardless of the f.o.b. point or other conditions of the sale. (d) Gross receipts from the rental, lease, or licensing of tangible personal property are in the City if the property is located in the City. (e) Gross receipts from services are in the City to the extent the purchaser of the services received the benefit of the services in the City. The Tax Collector shall promulgate regulations interpreting whether the purchaser of services received the benefit of services in the City for purposes of this Section 956.1(e). In promulgating such regulations, the Tax Collector shall comply with the requirements of Section 6.16-1 of Article 6 of this Business and Tax Regulations Code, including but not limited to the requirement that the Tax Collector hold a public hearing and allow public comment prior to the adoption of the regulations. Further, in promulgating such regulations, the Tax Collector shall review and consider sourcing rules and safe harbor provisions adopted by the State of California and other jurisdictions. (f) Gross receipts from intangible property are in the City to the extent the property is used in the City. In the case of financial instruments, sales are in the City if the customer is located in the City. The Tax Collector shall promulgate regulations interpreting whether intangible property is used in the City for purposes of this Section 956.1(f) and whether, in the case of financial instruments, the customer is located in the City. In promulgating such regulations, the Tax Collector shall comply with the requirements of Section 6.16-1 of Article 6 of this Business and Tax Regulations Code, including but not limited to the requirement that the Tax Collector hold a public hearing and allow public comment prior to the adoption of the regulations. Further, in promulgating such regulations, the Tax Collector shall review and consider sourcing rules and safe harbor provisions adopted by the State of California and other jurisdictions. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014; amended by Proposition M, 11/5/2024, Eff. 12/20/2024)

(a) For all persons required to determine an amount of gross receipts pursuant to this Section 956.2, that amount shall be all non- exempt combined gross receipts of the person multiplied by a fraction, the numerator of which is payroll in the City and the denominator of which is combined payroll. (b) Combined gross receipts are the total worldwide gross receipts of the person and all related entities to the person, unless the election provided for in California Revenue and Taxation Code Section 25110 is in effect for the person, in which case combined gross receipts shall be computed consistently with the water's edge election, as set forth therein. (c) Combined payroll is the total worldwide compensation paid by the person and all related entities to the person, unless the election provided for in California Revenue and Taxation Code Section 25110 is in effect for the person, in which case combined payroll shall be computed consistently with the water's edge election, as set forth therein. A person who has no combined payroll in a tax year shall have no gross receipts under this Section for that tax year. (d) Payroll in the City is the total amount paid for compensation in the City by the person and by all related entities to the person. (e) Compensation paid in the City shall be determined as follows: (1) Where compensation is paid by reason of work performed or services rendered by an individual wholly within the City, all of the compensation for such individual shall be attributable to the City. (2) Where compensation is paid by reason of work performed or services rendered by an individual partly within and partly without the City, the portion of such compensation attributable to the City shall be determined as follows: (A) Except as otherwise provided in this Section 956.2(e), the portion of such compensation attributable to the City shall be the portion of such compensation which the total number of working hours employed within the City bears to the total number of working hours within and without the City. (B) If the amount of such compensation depends on the volume of business transacted by such individual, then the portion of such compensation attributable to the City shall be the portion of such compensation which the volume of business transacted by such individual in the City bears to the volume of business transacted by such individual within and without the City. (C) If it is impracticable, unreasonable, or improper to apportion such compensation as aforesaid either because of the particular nature of the services of such individual, or on account of the unusual basis of compensation, or for any other reason, then the amount of such compensation reasonably attributable to work performed or services rendered in the City shall be determined on the basis of all relevant facts and circumstances of the particular case, in accordance with any rulings or regulations issued or promulgated by the Tax Collector for the purpose. (D) If the Tax Collector determines that the percentage of compensation attributable to the City, for any one or more persons, is a relatively stable percentage, the Tax Collector may establish that percentage as a prima facie evidence of compensation attributable to the City; provided, that the Tax Collector shall condition the establishment of such fixed percentage upon the obligation of the taxpayer to report immediately to the Tax Collector any significant change in the taxpayer’s mode of business which may impact the portion of the person’s compensation which is attributable to the City; and, provided further, that the Tax Collector may rescind any such fixed percentage at any time by providing written notice to the taxpayer of such rescission.

(f) "Compensation" means wages, salaries, commissions and any other form of remuneration paid to employees for services. In the case of any person who has no employees, compensation shall also include all taxable income for federal income tax purposes of the owners or proprietors of such person who are individuals. Those owners or proprietors shall be treated as individuals to whom compensation is paid for purposes of subsection (e). (g) The apportionment provided by this Section 956.2 shall not include in either the numerator or the denominator any payroll of persons exempt from tax under subsections (a) or (e) of Section 954. (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)

A person engaging in business within the City must file gross receipts tax returns as provided in Article 6. Those returns must be filed on a combined basis with all of that person's related entities. That person, and all of that person's related entities, constitute a combined group. Every combined group must file a single return; the combined group must choose a single person to file the return on its behalf. Each person within the combined group engaging in business in the City must provide a power of attorney to the person filing the return, authorizing the person filing the return to file said return and to act on behalf of each person with respect to payments, refunds, audits, resolutions, and any other items related to the tax liability reflected in the return. The power of attorney shall be substantially in a form prescribed or approved by the Tax Collector. Each return filed by a combined group constitutes a combined return under this Article and Article 6. The person filing any combined return shall pay the tax liability reflected on the return and any liability determined on audit at the time and in the manner set forth for returns and liabilities in Article 6. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014; amended by Ord. 271-13, File No. 131031, App. 11/27/2013, Eff. 12/27/2013, Oper. 1/1/2014) SEC. 957. TAX COLLECTOR AUTHORIZED TO DETERMINE GROSS RECEIPTS. The Tax Collector may, in his or her reasonable discretion, independently establish a person's gross receipts within the City and establish or reallocate gross receipts among related entities so as to fairly reflect the gross receipts within the City of all persons. This authority extends to determining whether any amount excluded from gross receipts by virtue of Section 952.3(f) is in whole or in part compensation or payment for services and thus included in gross receipts. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014) SEC. 958. ADMINISTRATION OF THE GROSS RECEIPTS TAX ORDINANCE. Except as otherwise provided under this Article, the Gross Receipts Tax Ordinance shall be administered pursuant to Article 6 of the San Francisco Business and Tax Regulations Code. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014) SEC. 959. ELECTION TO DESIGNATE TAX TO SMALL BUSINESS REZONING CONSTRUCTION RELIEF FUND. (a) For tax years beginning on or after January 1, 2025, a person or combined group may elect to designate up to 4% of the gross receipts tax liability paid by that person or combined group for the tax year for deposit in the Small Business Rezoning Construction Relief Fund, established in Administrative Code Section 10.100-335. The designation under this Section 959 shall be irrevocable and shall be made on the person or combined group’s original gross receipts tax return filed for the tax year to which the designation applies. (b) If for any tax year persons or combined groups elect to designate amounts under subsection (a) of this Section 959 that collectively exceed $8 million, any excess above $8 million shall not be deposited in the Small Business Rezoning Construction Relief Fund and shall be deposited in the General Fund to be used for any purposes of the City. (Added by Ord. 236-25, File No. 250782, App. 12/5/2025, Eff. 1/5/2026, Retro. 1/1/2025)

(Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014; repealed by Proposition F, 11/3/2020, Eff. 12/29/2020, Oper. 1/1/2021) SEC. 960. THE "PAYROLL EXPENSE TAX EXCLUSION" CREDIT. (a) “Payroll Expense Tax Exclusion Credit” means the dollar amount by which a person would have been able to reduce its payroll expense tax liability pursuant to the Enterprise Zone Tax Credit under Section 906A of former Article 12-A and/or the Biotechnology Exclusion under Section 906.1 of former Article 12-A, as if the payroll expense tax were in full force and effect and calculated at a rate of 1.5%. (b) For so long as a particular payroll expense tax exclusion listed under subsection (a) would have been in effect had the payroll expense tax not been repealed, a person may credit against its gross receipts tax liability for a tax year the amount of a particular payroll expense tax exclusion credit to which it would have been entitled under the former payroll expense tax; however, in no event shall such credit reduce a person’s gross receipts tax liability to less than zero. Any person who claims the credit under this Section 960 must meet all of the eligibility requirements of the former payroll expense tax exclusion(s) it claims. The credit may be claimed against the tax liability only of the person who would have qualified for the former payroll expense tax exclusion and not against any liability of related entities or other members of that person’s combined group. (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; Ord. 152-21, File No. 210828, App. 9/29/2021, Eff. 10/30/2021)

DESIGNATED AREAS IN THE CITY. (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: (A) For tax years ending on or before December 31, 2024, 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; (B) For the 2025 tax year, 0.45% of the person or combined group’s taxable gross receipts during the tax year from one or more of Business Activity Categories 5 and 6, as described in Sections 953.24 and 953.25 of this Article 12-A-1, and business activities described in NAICS codes 524 (Insurance Carriers and Related Activities), 5611 (Office Administrative Services), 5612 (Facilities Support Services), 5613 (Employment Services), 5614 (Business Support Services), 5615 (Travel Arrangement and Reservation Services), 5616 (Investigation and Security Services), 5617 (Services to Buildings and Dwellings), and 5619 (Other Support Services); and (C) For tax years beginning on or after January 1, 2026, 0.45% of the person or combined group’s taxable gross receipts during the tax year from one or more of Business Activity Categories 5 and 6, as described in Sections 953.24 and 953.25 of this Article 12-A-1, and business activities described in NAICS codes 517 (Telecommunications), 524 (Insurance Carriers and Related Activities), 5611 (Office Administrative Services), 5612 (Facilities Support Services), 5613 (Employment Services), 5614 (Business Support Services), 5615 (Travel Arrangement and Reservation Services), 5616 (Investigation and Security Services), 5617 (Services to Buildings and Dwellings), and 5619 (Other Support Services); 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. (g) Notwithstanding any other provision of this Section 960.1, no person or combined group may claim the credit authorized under this Section 960.1 for tax years commencing on or after January 1, 2029. (h) Commencing with a report filed no later than October 31, 2024: (1) For tax years 2023 and 2024, the Tax Collector shall submit an annual report by October 31 of the calendar year following each tax year to the Board of Supervisors that sets forth aggregate information on the dollar amount of the credits taken each year and the number of businesses taking the credit; and (2) For tax years 2025 through and including 2028, the Tax Collector shall submit an annual report by March 31 of the calendar year two years after each tax year to the Board of Supervisors 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; amended by Proposition M, 11/5/2024, Eff. 12/20/2024; Ord. 187-25, File No. 250576, App. 10/6/2025, Eff. 11/6/2025)

PAID. For tax years beginning on or after January 1, 2025, a person or combined group shall be allowed a credit against that person or combined group’s Gross Receipts Tax (including the administrative office tax imposed under Section 953.8) for 50% of Stadium Operator Admission Taxes under Article 11 of this Business and Tax Regulations Code paid to the City during the tax year and 50% of taxes paid to another local government during the tax year that are substantially similar to the Stadium Operator Admission Tax under Article 11 of this Code. In no event shall the credit under this Section 960.2 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 year. (Added by Proposition M, 11/5/2024 Eff. 12/20/2024)

RETAILERS.

(a) For tax years beginning on or after January 1, 2025, a person or combined group shall be allowed a credit against that person or combined group’s Gross Receipts Tax equal to 0.5% of such person or combined group’s taxable gross receipts from business activities described in NAICS code 445110 (Supermarkets and Other Grocery Retailers (except Convenience Retailers)), up to a maximum annual credit of $4,000,000. (b) For purposes of this Section 960.3, “taxable gross receipts” means a person or combined group’s gross receipts, not excluded under Section 954 of this Article 12-A-1, attributable to the City. (c) In no event shall the credit under this Section 960.3 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 year. (d) Notwithstanding subsection (a), the credit under this Section 960.3 shall not be allowed against the Administrative Office Tax imposed under Section 953.8. (Added by Proposition M, 11/5/2024, Eff. 12/20/2024)

(a) The first person or combined group to both enter into a binding agreement to lease all or a portion of each Qualified Building and require at least 100 employees to occupy that Qualified Building shall be allowed a credit against that person or combined group’s Gross Receipts Tax (including any tax on administrative office business activities under Section 953.8). Any other person or combined group that meets these requirements for such Qualified Building shall not be entitled to the credit, even if their lease is for a different portion of the Qualified Building. The credit shall be an annual credit commencing in the tax year following the tax year in which the person or combined group entered into the lease of all or a portion of the Qualified Building and first required at least 100 employees to occupy the Qualified Building, and continuing for the lesser of 15 years or until the end of the tax year in which the person or combined group’s original lease term without extensions expires (the “Credit Term”); provided, however, that the person or combined group may only take the credit for each tax year during the Credit Term in which the person or combined group continues to lease the Qualified Building and continues to require at least 100 employees to occupy the Qualified Building. 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 equal the lesser of: (1) the Gross Receipts Tax liability of the person or combined group for that tax year; and (2) $4,000,000. (b) For purposes of this Section 960.4, “Qualified Building” means a building located within the City that meets all of the following requirements: (1) The building contains at least 450,000 gross square feet, exclusive of any space provided under subsection (b)(7); (2) Construction began on the building between November 5, 2024 and November 4, 2029, inclusive; (3) Construction of the building incorporated at least 50% of the remains of the exterior walls of a prior structure (measured by the state of the structure when its owner of record on November 5, 2024 acquired it) that was at least 100 years old on November 5, 2024; (4) Construction on the building created at least 500 construction jobs over the course of construction; (5) At least $500,000,000 (not including the cost of the land or financing costs) was expended for the development and construction of the building; (6) Except as provided in subsection (b)(7), the building is used exclusively for non-residential purposes; (7) The building is part of a project that provided (prior to issuance of the building’s first temporary certificate of occupancy) at least 50,000 gross square feet of publicly accessible open space or affordable housing, or that designated building space to be leased to or occupied by any organization that: (A) serves the community, including but not limited to an organization dedicated to educating youth, childcare, the arts, or serving low-income, unemployed, or unhoused persons; or (B) is tax exempt under Internal Revenue Code Section 501(c)(3). The requirement in this subsection (b)(7) may be satisfied with space that is not within or adjacent to the Qualified Building. (c) The Planning Department shall, by January 1, 2025, establish procedures for developers and other persons to obtain certification that a building is a Qualified Building under subsection (b). To be eligible for the credit, the person or combined group claiming the credit must submit a copy of that certification with the person or combined group’s Gross Receipts Tax return. (d) In no event shall the credit under this Section 960.4 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 year. (Added by Proposition M, 11/5/2024, Eff. 12/20/2024) SEC. 961. [REPEALED.] (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014; repealed by Proposition F, 11/3/2020, Eff. 12/29/2020, Oper. 1/1/2021)

SEC. 962. AMENDMENT OF ORDINANCE. The Board of Supervisors may amend or repeal Article 12-A-1 of the Business and Tax Regulations Code without a vote of the people except as limited by Article XIIIC of the California Constitution. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014) SEC. 963. EFFECT OF STATE AND FEDERAL AUTHORIZATION. To the extent that the City's authorization to impose or collect any tax imposed under this Article 12-A-1 is expanded or limited as a result of changes in state or federal law, no amendment or modification of this Article 12-A-1 shall be required to conform the taxes to those changes, and the taxes are hereby imposed and the Tax Collector shall collect them to the full extent of the City's authorization up to the full amount and rate of the taxes imposed under this Article 12-A-1. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014) SEC. 964. SEVERABILITY. Except as provided in Section 965(b) below, if any section, sentence, clause, phrase, or portion of Article 12-A-1 is for any reason held to be invalid or unenforceable by a court of competent jurisdiction, the remaining sections, sentences, clauses, phrases, or portions of this Article shall nonetheless remain in full force and effect. The people of the City and County of San Francisco hereby declare that, except as provided in Section 965(b), they would have adopted each section, sentence, clause, phrase, or portion of this Article, irrespective of the fact that any one or more sections, sentences, clauses, phrases, or portions of this Article be declared invalid or unenforceable and, to that end, the provisions of this Article are severable. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014) SEC. 965. SAVINGS CLAUSE. (a) No section, clause, part or provision of this Article 12-A-1 shall be construed as requiring the payment of any tax that would be in violation of the Constitution or laws of the United States or of the Constitution or laws of the State of California. Except as provided in subsection (b) of this Section 965, if any section, clause, part or provision of this Article, or the application thereof to any person or circumstance, is held invalid or unconstitutional, the remainder of this Article, including the application of such part or provision to other persons or circumstances, shall not be affected thereby and shall continue in full force and effect. To this end, the provisions of this Article are severable. (b) If the imposition of the gross receipts tax in Section 953 is held in its entirety to be facially invalid or unconstitutional in a final court determination, the remainder of this Article 12-A-1 shall be void and of no force and effect, and the City Attorney shall cause it to be removed from the Business and Tax Regulations Code. (Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014) SEC. 966. CONTROLLER REPORTS. The Controller shall prepare reports by September 1, 2026, and September 1, 2027, respectively, that discuss current economic conditions in the City and the performance of the tax system revised by the voters in the ordinance adding this Section 966. (Added by Proposition M, 11/5/2024, Eff. 12/20/2024)