November 5, 2019 San Francisco Controller issues payroll expense tax rate for 2019 The City of San Francisco (City) has issued the payroll expense tax rate for 2019, which is unchanged from the prior year at 0.380%. San Francisco's payroll expense tax was set to fully phase out in 2018 after the phase-in of the City's gross receipts tax. Nevertheless, the City ordinance enacting the gross receipts tax allows the San Francisco Controller to retain the payroll expense tax to enable the City to meet its projected revenue. As such, the San Francisco Controller issues a rate modification to the payroll expense tax every year. Ernst & Young LLP reached out to the City to confirm the rate, as the City republished its 2018 memorandum on the subject in July without updating it for 2019. Representatives of the City confirmed that the San Francisco Controller rate adjustments applicable for 2018 apply for 2019 as well. The small business exemption limits remain the same for 2019: businesses with $1,120,000 or less of receipts are exempt from the receipts tax while businesses with $300,000 or less of payroll are exempt from the payroll expense tax. ———————————————
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