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San Francisco Marin Medical Society Blog

SFMMS Advocacy Produces County Proposal to Reduce Physician Tax Burden

In late 2023, San Francisco’s Treasurer and Controller convened business leaders for a working group to author recommendations to reform San Francisco’s Gross Receipts Tax, which went into effect after a 2020 ballot measure. 

The 2020 Gross Receipts Tax disproportionately affects businesses delivering ‘health services,’ including medical and dental practices with gross revenues over $2 million. These businesses were taxed at a higher rate than almost any other class of business, placing an unsustainable tax burden on practices already contending with the effects of the COVID-19 pandemic on patient volumes and stagnant reimbursement rates.

SFMMS and the San Francisco Dental Society partnered to participate in these working group meetings and met separately with the office of the Treasurer to propose changes that would correct disparities in the Gross Receipts Tax and reduce the tax burden on medical and dental practices in San Francisco. We shared with their staff the effects of the Gross Receipts Tax on the provision of care in San Francisco and the way in which these taxes would reduce patient choice.

In February 2024, the Treasurer’s office issued their official proposal to reform the Gross Receipts Tax, which contained several SFMMS suggestions. If this proposal becomes law, it will broadly benefit small and solo private practice physician practices in San Francisco. 

The tax burden would be determined by business activity undertaken, proportion of payroll located in county, and bracket of revenue, which increases the progressiveness of the taxation by shifting the burden to those earning more than $25 million.

The result would be a 33 percent reduction in tax revenues collected from those performing health activities. Additionally, the tax code would be simplified, exemptions to the tax would be expanded, license and registration fees would be reduced or eliminated, and additional resources would be made available to small businesses to help to project their taxes.

You can view the slides of Treasurer’s proposal to amend the San Francisco Gross Receipts Tax >>HERE<<

The next step will be for the San Francisco Board of Supervisors or San Francisco Mayor to qualify this proposal for the November 2024 ballot, at which point SFMMS will analyze the ballot initiative and deliberate support at the SFMMS Board of Directors.

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