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SF Local Tax Filing Deadline Extended to April 30; LA Remains March 1

by Alex Thacher, Stephanie Shorkley
February 02, 2021

The deadline for San Francisco’s local tax filings has been extended to April 30, 2021. Los Angeles has not yet indicated whether it will extend its own local deadlines and is still set for March 1, 2021. In addition, San Francisco passed ballot measures that may impact local tax calculations in 2022.

San Francisco

San Francisco City Ordinance #201260

On January 12, 2021, the San Francisco Board of Supervisors approved San Francisco City Ordinance #201260 which sought to extend the filing deadline of the San Francisco Payroll Expense Tax, Gross Receipts Tax, Administrative Office Tax, Homelessness Gross Receipts Tax, Commercial Rents Tax and Annual Business Tax Return from March 1, 2021, to April 30, 2021. San Francisco's 2020 Business Registration tax return, originally due June 1, 2020, and extended to March 1, 2021, has been further extended to April 30, 2021. This ordinance was signed by Mayor Breed on January 22, 2021.

Qualified entertainment businesses will have their license fees, such as liquor licenses, business registration for fiscal years beginning July 1, 2020, and July 1, 2021, and payroll taxes for tax year beginning January 1, 2020, waived. Restaurants will have the same fees and taxes waived but only for 2020. Refunds for any waived amount already paid by the taxpayer are also available.

To qualify for these exemptions, a business needs to be a “qualified business.” A qualified restaurant business “means a Person or Combined Group that both (a) had no more than $750,000 in total combined San Francisco Gross Receipts in calendar year 2019; and (b) held a valid Restaurant Permit on or after April 1, 2020.” A qualified entertainment business “means a Person or Combined Group that both (a) had no more than $20,000,000 in total combined San Francisco Gross Receipts in calendar year 2019; and (b) held a valid Place of Entertainment Permit on or after April 1, 2020.”

San Francisco has a statute of limitations of one year from the previous year’s due date for refunds. This means that the deadline for refunds and refund claims is March 1, 2021. The ordinance has not moved the due date for refund claims or the statute of limitations.

San Francisco Ballot Measures

The city also recently passed ballot measures which may affect businesses in upcoming years. Prop F, which is the payroll expense tax elimination, took effect January 1, 2021. Prop F will fully repeal the payroll tax while also increasing gross receipts tax rates by 40% across all industries.

Beginning in 2021, tax rates for the information industry will rise to match those of the professional, scientific and technical services industries. Beginning in 2022, a number of other industries will see stepped increases to the tax rates. Businesses that operate only an administrative office in San Francisco currently pay a 1.4% payroll tax instead of a gross receipts tax. This measure increases that tax as well, to 1.47% in tax year 2022, 1.54% in 2023 and 1.61% in 2024 and thereafter.

Prop L is the CEO tax, which is effective January 1, 2022. This measure imposes an additional tax on annual gross revenues of companies based on the compensation ratio of the pay of the highest-paid executive to the business's median employee pay. The tax becomes effective January 1, 2022.

Los Angeles

The Los Angeles City Council has not indicated whether they will extend the deadline to file Los Angeles City Business Registration taxes. The deadline is still March 1, 2021, which is only one month away. In addition, Los Angeles also has a one-year statute of limitation for refund claims due one year from the previous year’s due date. This would make the due date for refund claims March 1, 2021.

Insights

The Los Angeles local filing is still due March 1, 2021. All above listed San Francisco local taxes were extended to April 30, 2021. Neither one of these jurisdictions has moved the deadline for refund claims – these are still due March 1, 2021. Taxpayers operating in these jurisdictions should be gathering data to get these returns timely filed.

With Governor Newsom’s Executive Order N-33-20, issued in March 2020, which required employees to work from home, taxpayers’ in-city activities for San Francisco and Los Angeles have likely changed significantly from prior years. Therefore, the analysis and apportionment methodologies used in prior years may be different this year and additional analysis and consideration will likely be required. Next year, additional changes will also be taking place regarding the San Francisco local tax returns and analysis.

If you have any questions or need help, contact our experts.

February 02, 2021

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Authors
Alex Thacher - Partner, Tax - San Jose, CA | Armanino
Partner
Stephanie Shorkley - Tax, San Ramon | Armanino
Senior Manager
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