Doing business in San Francisco: city taxes on top of state filings

The stack

• Every business operating in SF registers with the Treasurer & Tax Collector and renews its registration each year.
• Prop M (2024) raised the small-business exemption to $5 million of San Francisco gross receipts, starting with the 2025 tax year filed in 2026.
• State obligations stack underneath: the $800 minimum, the LLC fee on California receipts, and the Statement of Information.

The city layer after Proposition M

San Francisco taxes businesses on their San Francisco gross receipts, with rates that vary by industry and rise with size. Proposition M, approved by voters in November 2024, rewrote the structure: starting with tax year 2025 (returns due in early 2026), businesses with San Francisco gross receipts of $5 million or less generally don’t file the Gross Receipts Tax or Overpaid Executive Tax return at all, up from a $2.25 million ceiling. Larger businesses file annually and pay quarterly estimates. The annual deadline is the last day of February (March 2 in 2026, because February 28 fell on a weekend).

Registration still applies to everyone

Every business engaged in business in San Francisco, including most sole proprietors, must hold a current business registration certificate and renew it each year. Related legislation eliminated or reduced registration and license fees for many small businesses from 2026, but the registration itself remains required.

Worked example

A three-person Delaware SaaS company with an office in SoMa and $1.8 million of revenue, half from San Francisco customers, is under the $5 million exemption and files no gross receipts return. It still renews its city registration, registers in California as a foreign corporation ($100), pays the state’s $800 minimum or 8.84% of California-apportioned income, and runs California payroll.

The state layer underneath

City taxes sit on top of state obligations, never instead of them. For the CA side, see Foreign-qualify in California, and check whether a hire or customer in San Francisco creates a filing duty in the nexus checker.