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Q:
How do I know if what I'm doing is considered a "business" or
not? Do I need to register as a business?
Q: I want to start a business in San Francisco. What are the procedures? 1. Verify that the location in which you wish to do business is zoned for that purpose. Zoning information can be obtained from the Zoning Division of the Planning Department 2. Determine your type of ownership. If operating as a sole proprietor, skip to Step 4. If operating as other than a Sole Proprietor, check with the State regarding filing requirements and file for a Federal Employer Identification Number. Corporations and non-profit corporations must register with the Secretary of State Limited Liability companies (LLC), limited liability partnerships (LLP), limited partnerships, and general partnerships should call the Secretary of State Sacramento office for filing requirements. 3. Obtain a Federal Employer Identification Number (EIN) from the Fresno, California office of the Internal Revenue Service. Fill out an SS4 form ("Application for Federal Employer Identification Number") and have it processed by phone, fax or mail. 4. Check to make sure that the business name(s) you wish to use for your business is not currently registered with the City and County of San Francisco. This can be verified online at http://services.sfgov.org/bns/start.asp 5. Register your business with Office of the Treasurer & Tax Collector within fifteen days of the start of business. Though it is advised to register in person at City Hall, Room 140, registration can also be done by mail. Applications and information are available at http://sfgov.org/tax 6. If using a Fictitious Business Name (a.k.a. "FBN" or "dba" - "doing business as"), file a "Fictitious Business Name Statement" with the Office of the County Clerk. 7. Certain types of businesses require additional permits and licenses from the local, state or federal government (permits and/or licenses from departments of Health, Fire and/or Police Departments, Seller's Permit, building permits, etc.). For afairly comprehensive list of regulatory agencies and the permits and licenses they issue click here
Q: How long does it take to receive a Business Registration Certificate? A: A Business Registration Certificate will be mailed to the mailing address on file within ten (10) business days of the starting date indicated when the business was registered with the Office of the Treasurer & Tax Collector. In the event that the business owner needs the certificate sooner, a temporary certificate can be requested.
Q: How long does my registration last? Do I need to renew my registration? A: The business registration certificate is issued on a yearly basis. The one-year registration period is based on San Francisco's fiscal year calendar which begins on July 1 and ends June 30th of the following year. Every year thereafter, the Business Tax Registration Certificate is renewed each year in February for the following full fiscal year.
Q: What is the fee for the Business Registration Certificate? A: For new businesses, the first year's registration fee is based on the tax due on its estimated payroll expense liability as reported on the Application for Business Tax Registration. The tax rate on payroll expense is 1.5%. Businesses that hire employees to perform work or render services within San Francisco pay registration fees based upon their total payroll expense attributable to San Francisco. This fee may also be prorated based on the date of application. For existing businesses, the registration fee is based on the tax due on their payroll expense liability as reported on the most recent Annual Payroll Tax Statement. Example: Assuming your estimated payroll expense for a 12-month period is $350,000, your computed tax due is $5,250: $350,000 x 1.5% (.015) = $5,250. The registration fee is therefore $150, as indicated in the table below.
Q: What is the registration fee if I do not have any payroll? A: Businesses that have less than $1 of estimated payroll expense within San Francisco pay the Minimum Registration Fee of $25. There is no prorating of the Minimum Registration Fee.
Q: What is the registration fee if my business started after the beginning of the year? A: Registration fees for new businesses starting after the first quarter may be prorated. The fee for businesses starting in the first quarter is 100% of the registration fee; second quarter, 75%; third quarter 50%; and fourth quarter, 25%. There is no prorating of the Minimum Registration Fee.
Q: Are there other requirements in addition to registering? A: In addition to registering, you must file a Payroll Tax Statement no later than the last day of February each year. It is important to note that you must file a statement even if your business has no payroll expense. Businesses with total taxable payroll that falls below a certain threshold qualify for a Small Business Exemption (SBE), and are exempt from having to pay an y payroll tax that year, provided their statement is filed timely. Businesses failing to file a statement by the deadline will be subject to penalty and interest, and lose eligibility for the SBE.
Q: What is a "Business Class" and how do I determine what mine is? A: For the purposes of San Francisco Business Tax Registration, the Business Class is one of the following two-digit numbers: 01. Commission Merchant or Broker is defined as essentially a broker of merchandise who sells goods not owned by himself. Only commissions are taxable. For administrative convenience, realty, insurance, travel, etc., brokers are also included in this classification. 02. Contractors are liable for the tax on the total contract price on all San Francisco projects. This classification does not allow deductions for subcontractor payments or consultant fees. Commencing January 1989, a contractor performing work in San Francisco for which a reroofing permit is required shall display a registration tag on every company vehicle with a commercial license used by the contractor in the conduct of such work. 03. Hotels, Apartments, etc. Persons renting or letting apartments in a structure of 4 units or more are liable for the tax. Owner occupancy of one or more of the 4 units does not exempt the structure from the tax. 04. Laundry, Cleaning and Dyeing, Agent, etc. 05. Lending Money, etc. 06. Personal Property Rental includes the lease or rental of tangible property such as autos, computers, etc. 07. Other Businesses. This is a miscellaneous classification that includes all means of livelihood not specially taxed by other provisions of this ordinance; i.e., commercial building operators, automobile repair shops, barbers, doctors, attorneys, condominium developers, etc. 08. Retail Sales is defined as the sale of goods and wares to the consumers thereof. 09. Storage, Freight Forwarding. 10. Telephone, Gas, Electric, Steam, Railroad Services. 11. Transporting Persons for Hire includes revenue from San Francisco mileage of taxis, buses, etc. 12. Trucking-Hauling includes trucks and tractors used in intra-city hauling of property. 13. Wholesale Sales is defined as the sale of goods and wares for resale. 15. Architects and Engineers are liable for the tax on projects at any location based on the percentage of time worked in San Francisco. This classification does not allow deductions for subcontractor payments or consultant fees. 16. Nonprofit Garage Corporations.
Q: I have just sold my business. Can I transfer the remaining time left on the registration and licenses to the new owner? A: No. Business registrations, permits and licenses are non-transferable. The new owner must notify the Office of the Treasurer & Tax Collector and any applicable regulatory agencies and apply for a new permit or license.
Q: What if I move or need to make changes to my business account? A: In order to make changes to a business account, we require signed authorization of the owner or their approved designee. Unfortunately an email alone is not sufficient. In order to process your request, you can authorize and process this change immediately by coming in person to our office at Room 140 in City Hall. Otherwise, you can submit the information via mail or fax with an authorized signature. The signed document can be faxed to (415) 554-6207, ATTN: Taxpayer Assistance, or mailed to: Office of the Tax Collector Please be sure to include the business name, ownership name, and certificate number (if possible).
Q: What is a "NAICS Code" and how do I determine what mine is? A: Beginning in 1997, the Standard Industrial Classification (SIC) was replaced by the North American Industry Classification System (NAICS - pronounced "nakes"). This six-digit code is a major revision that not only provides for newer industries, but also reorganizes the categories on a production/process-oriented basis. This new, uniform, industry-wide classification system has been designed as the index for statistical reporting of all economic activities of the U.S., Canada, and Mexico. You can find a listing of NAICS codes on the U.S. Census Bureau Website at: http://www.census.gov/epcd/www/naics.html To locate your NAICS code on the Census Bureau Website, simply select one of the industry categories near the top of the web page (i.e. Real Estate, Professional etc.), then select the 6 digit code that "best" categorizes the scope of your business operations. If you business operation falls into multiple categories (i.e. Construction, Real Estate), select the NAICS code that represents the majority of your business operations.
Q: I want to close my business, what do I need to do? A: If the business that you want to close is in San Francisco call the Treasure & Tax Collectors Office at (415) 554-4400 for information and procedures.
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