The State sets the sales tax in San Francisco at 8.625%. The City keeps 1% of the total sales tax revenue. The revenue from this tax goes into the City's General Fund budget.
The dashboard below reports on the City’s sales tax revenue. There are three parts to the dashboard:
- The total sales tax paid to the City each quarter
- The percent change in the most recent tax revenue from the same quarter in 2019 by neighborhood
- The total sales tax per quarter by neighborhood
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Data on sales tax collections comes from HdL Companies. Data is shared annually to protect the confidentiality of the sales tax data. For general information on sales tax, please visit California Department of Tax and Fee Administration.
If a business has multiple locations in the city, the total sales tax paid by the business in the city is divided by the number of locations. That number is assigned to each of the locations. If there are multiple locations in a single neighborhood, the amounts from each location in the neighbor are added together towards the neighborhood total. Here is an example: Coffee Shop has one location in the Sunset and two locations in the Bayview. Coffee Shop paid a total of $9,000 in sales tax to the City. The total would be divided by the number of locations: $9,000 / 3. Each location would be noted as having paid $3,000 in sales tax. The total amount Coffee Shop contributed to all sales tax paid in the Sunset would be $3,000. The total amount Coffee Shop contributed to all sales tax paid in the Bayview would be $6,000 because they had two locations in that neighborhood.
The dashboard reports sales tax by quarter. The months in each quarter are below:
- January, February, and March are Quarter 1 for the year.
- April, May, and June are Quarter 2 for the year.
- July, August, and September are Quarter 3 for the year.
- October, November, and December are Quarter 4 for the year.
Why do we track this metric?
The sales tax is a major source of revenue for the local governments. We also look at overall sales tax to understand if consumer spending in the city is growing or shrinking. This shows the interest and ability for consumers to purchase goods in San Francisco.
By studying sales tax across neighborhoods, we can better understand how economic activity varies across the city and which neighborhoods may need unique interventions or support.
How do we interpret this metric?
The pandemic caused a dramatic drop in sales tax in every neighborhood within the city. Citywide sales tax revenue then rose steadily, but at the end of 2022, it was still about 15% less than pre-pandemic.
Generally, San Francisco generates the least sales tax in the first quarter of the year and the most in the fourth quarter. Therefore, trend lines go from low to high over the course of one year and repeat that pattern each year.
An increase or decrease in sales tax could happen for many reasons, including a change in the:
- number of consumers
- number of businesses operating
- type or cost of goods sold
The map allows us to track how spending in neighborhoods compares to pre-pandemic spending. The closer the percent change is to 0%, the closer each neighborhood is to generating the same amount of sales tax as it did before the pandemic. Neighborhoods shaded dark blue generated more sales tax than in 2019. Neighborhoods shaded dark yellow generated less sales tax than in 2019.
Different neighborhoods generate very different amount of sales tax. The Financial District/South Beach neighborhood has historically generated the greatest share of the city’s sales tax by far. The SOMA, Mission, Bayview, North Beach and the Tenderloin/Civic Center neighborhoods also generate a larger amount compared to other neighborhoods.
By the end of 2022, neighborhoods showed big differences in their recovery progress. For example, the Presidio, Seacliff, Western Addition, and Treasure Island neighborhoods were more than 25% above than their pre-pandemic levels, while the Tenderloin, Glen Park, SOMA, and Financial District neighborhoods were still down 18% or more. Since many of the neighborhoods showing the slowest recovery have historically been the biggest contributors to the city’s sales tax base, this will likely impact the city’s budget.