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SF Business Tax Reform Plans Combined For November Ballot

SAN FRANCISCO (KCBS) - San Francisco Mayor Ed Lee and the Board of Supervisors reached a compromise on Monday for a November ballot proposal that could bring dramatic reform the city's business tax system.

The proposal is designed to reform a tax system that currently penalizes businesses for hiring workers by taxing payroll. It also means that a single tax proposal will head to the ballot rather than separate competing ones.

KCBS' Barbara Taylor:

Instead of a payroll tax there would be a tax on gross receipts. It's something that Mayor Ed Lee said is good for job development.

"The city is going to get that much more economically friendly if you've got something more than a payroll tax and we found the right blend," he said.

This plan would also double the number of businesses that would pay the taxes from about 7,500 to about 15,000. Every business however, even the smallest, would pay much more for a business license.

Supervisor John Avalos said that will raise about $28.5 million in increased revenue.

"I really applaud the City coming together on a measure that would bring in new revenue and make our budget more flexible," he said.

Small businesses that don't have as much revenue but want to hire and grow will benefit the most under the plan. The real estate and financial sectors--that make much more money but have few employees--will pay more.

If approved by the voters in November, the new gross receipts tax will be phased in over a five years period.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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