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San Francisco Marin Medical Society Blog

SFMMS Advocacy Helps to Produce Historic Tax Reform Proposal in Boon for Small and Solo Medical Practices in San Francisco

Late in 2023, the Office of the Controller and Office of Treasurer & Tax Collector for the City and County of San Francisco convened stakeholders for what would become a half-year process to develop a proposed reform of San Francisco’s business tax code.

On Monday, May 6th, the final proposal was submitted to San Francisco Mayor London Breed with the intention of qualifying it for the November 2024 ballot. The proposal, if passed into law, would broadly benefit medical practices in San Francisco, and in particular private medical practices with revenue of $5 million or less.

The proposal can be found on a website created for this project, by CLICKING HERE.

The proposal shifts the tax obligation to companies with revenues more than $25 million and that locate their payroll outside of the county. The small business exemption will be increased to $5 million of revenue. Licensing and regulatory fees will be streamlined or eliminated. The proposal also contains new resources for taxpayers to help them project their tax obligation.

The result is that the proportion of revenue collected from businesses engaging in ‘health activities,’ such as private medical practices, would be reduced by 30 percent.

Our initial analysis shows that this proposal would be a boon for small and solo medical practices, and an important contributor to maintaining a diversity of patient choice in San Francisco. This is vital in the aftermath of the COVID-19 pandemic, which hit private medical practices especially hard.

SFMMS has partnered with the San Francisco Dental Society to provide feedback to the Office of the Controller and Office of Treasurer & Tax Collector throughout this process, making clear how the existing brackets in the county’s Gross Receipts Tax disproportionately impacts medical and dental practices, reducing the sustainability of small and solo practices and ultimately reducing patient choice. We clarified for the city’s team how physicians and dentists are reimbursed and the challenge we face in San Francisco to recruit and retain vital health human services. It’s essential that the business environment established for medical practices works hand-in-hand with city departments, such as the San Francisco Department of Public Health, to attain physician recruitment goals and advance strategic priorities, such as the 2022 Overdose Prevention Plan.

The SFMMS Board of Directors will consider the finalized ballot initiative language when it becomes publicly available. If the proposal is qualified for the ballot initiative, and the SFMMS Board votes to support it, we’ll need the engagement of physicians across San Francisco to advocate for its passage into law.

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