Ordinance amending the Business and Tax Regulations Code to reduce the tax rates on gross receipts from telecommunications business activities by moving those activities from Category 5 to Category 4, beginning January 1, 2026, for purposes of the gross receipts tax and the homelessness gross receipts tax; and to retain taxpayers’ eligibility to take the tax credit for opening a physical location in designated areas of the City, as applied to gross receipts from telecommunications business activities.

Proposition M changed the City’s business tax structure, consolidating business activity categories and their associated tax rates, prompting the need for further adjustments to telecommunications tax rates.

A proposed ordinance was introduced to move telecommunications business activities from Category 5 to Category 4, reducing their tax rates.

A substitute ordinance was submitted to retain taxpayers’ eligibility for the new physical location tax credit while lowering the gross receipts tax rates for telecommunications.

The Government Audit and Oversight Committee recommended the proposed ordinance for approval, considering its fiscal impact alongside related settlements with telecommunications companies.

The Board of Supervisors passed the ordinance on first reading, moving it closer to final approval.

The Board of Supervisors finally passed the ordinance, officially amending the Business and Tax Regulations Code.

The Mayor approved the ordinance, allowing the changes to take effect starting January 1, 2026.