San Francisco city officials Monday highlighted a local organic produce distributor as a company that would benefit from a ballot measure that seeks to reform the city’s business tax.
Mayor Ed Lee and three members of the Board of Supervisors visited Veritable Vegetable in the city’s Dogpatch neighborhood this morning to push the consensus measure, which would replace San Francisco’s 1.5 percent payroll tax with a gross receipts tax.
The board voted last week to combine two separate proposals by board president David Chiu and Supervisor John Avalos into one measure that they plan to place on the November ballot via a vote at this Tuesday’s meeting.
Lee said today that he wanted to “showcase an example of the kind of company that will benefit” from the measure.
“We did not want to punish companies that are creating jobs,” he said.
Bu Nygrens, a co-owner of Veritable Vegetables, said her company stands to save about $7,000 under the new system.
“We’re excited that we’re going to see a reduction in our taxes,” Nygrens said, adding that the measure will “more equitably distribute the tax burden” among businesses in the city.
San Francisco is the only city in the state that levies a payroll tax, which charges companies for adding new employees. The new tax would charge the annual revenue of a business and would be phased in while the payroll tax is phased out.
Chiu said the current tax “penalizes the hiring of employees” and needs to be overhauled.
San Francisco used a hybrid tax system in the 1970s and 1980s that allowed companies to pay whichever was the higher amount between its gross receipts or payroll tax, but the system was eliminated in the 1990s after a similar system in Los Angeles was ruled unconstitutional.
Dan McMenamin, Bay City News