Pillsbury Winthrop Shaw Pittman

Lingering questions about the San Francisco gross receipts tax

By Michael J Cataldo and Paul T Casas

The first instalment payment for the new San Francisco gross receipts tax (GRT) is due on 30 April 2014. Many questions about the new tax remain as this deadline approaches. While the city has provided some relief from instalment underpayment penalties, taxpayers need answers to these questions to accurately determine their tax liability.

On 26 November 2013, the San Francisco Board of Supervisors approved amendments to the San Francisco Business and Tax Regulations Code, providing for penalty relief for delinquent GRT instalment payments, mandatory combined reporting for payroll expense tax purposes and the imposition of a new penalty for failure to file returns on a combined basis or failure to provide worldwide payroll or gross receipts information.

One of the amendments to the code provides welcome relief to taxpayers for delinquent GRT instalment payments, the first of which is due on 30 April 2014. GRT instalment payments are due every 30 April, 31 July and 31 October of the current tax year, and the last day of February of the immediately following tax year. A delinquency penalty of five per cent per month (not to exceed 20 per cent in the aggregate) is imposed on any instalment underpayment, and interest on such underpayments is imposed on any unpaid or underpaid balance at one per cent per month…

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