If your startup has an office in San Francisco, or employees who work from the city, you have a third layer of tax compliance on top of the federal and Delaware obligations every venture-backed company carries. The good news, which surprisingly few founders have absorbed: after the Proposition M overhaul that took effect January 1, 2025, most startups under $5 million in San Francisco gross receipts owe the city almost nothing beyond a registration fee and a couple of filings.
The bad news is that the filings changed shape in 2026. The registration renewal moved from May 31 to the start of March, the gross receipts tax return merged into the same form, and a lot of founder folklore about SF taxes, starting with the payroll expense tax, is out of date.
This guide layers the San Francisco and California obligations on top of the federal calendar. For the federal and Delaware dates themselves, see our complete 2026 startup tax calendar. Everything below reflects the rules published by the SF Treasurer and Tax Collector, the SF Assessor-Recorder, the FTB, and the CDTFA as of mid 2026; local rules change often, so confirm current figures on the official pages before you file.
The Consolidated 2026 Calendar
Dates assume a calendar year Delaware C-corp doing business in San Francisco. Weekend shifts are already applied.
| Date | Layer | What is due |
|---|---|---|
| Jan 15 | Federal | Q4 2025 personal estimated taxes for founders (Form 1040-ES) |
| Feb 2 | Federal | W-2s to employees; 1099-NEC to contractors and IRS |
| Mar 1 | Delaware | Delaware franchise tax and annual report |
| Mar 2 | San Francisco | Unified Annual Business Registration and Tax Form: 2026-2027 registration renewal plus 2025 gross receipts tax return (and Homelessness and Overpaid Executive taxes if applicable) |
| Apr 1 | San Francisco | Form 571-L business property statement due (no penalty if filed by May 7) |
| Apr 15 | Federal | Form 1120 or Form 7004 extension; Q1 federal estimate |
| Apr 15 | California | Form 100 filing and full payment; Q1 CA estimate (30 percent); $800 minimum franchise tax for corporations past year one |
| Apr 30 | San Francisco | Q1 gross receipts tax estimated payment (larger payers only) |
| Jun 15 | Federal + CA | Q2 estimates (CA installment is 40 percent) |
| Jul 31 | San Francisco | Q2 gross receipts tax estimated payment |
| Aug 31 | San Francisco | Unsecured property tax payment on your 571-L assessment |
| Sep 15 | Federal + CA | Q3 estimates (CA installment is 0 percent for most corporations) |
| Oct 15 | Federal | Extended Form 1120 |
| Oct 31 | San Francisco | Q3 gross receipts tax estimated payment |
| Nov 16 | California | Extended Form 100 (November 15 falls on a Sunday) |
| Nov 30 | San Francisco | Extended SF annual tax filings, if an extension was requested by March 2 |
| Dec 15 | Federal + CA | Q4 estimates (CA installment is 30 percent) |
Now each obligation, with who it actually applies to.
SF Business Registration: Everyone, Every Year, Now Due in Winter
Every person engaging in business in San Francisco must register with the Treasurer and Tax Collector and renew that registration annually, regardless of size. The $5 million small business exemption discussed below spares you from gross receipts tax, not from registering. Two things changed recently:
The deadline moved. For years, registration renewal was due May 31. Beginning in 2026, renewal is due on the last day of February as part of one unified Annual Business Registration and Tax Form that also contains the gross receipts tax return. Because February 28, 2026 is a Saturday, the 2026 deadline is Monday, March 2. This is the SF deadline founders are most likely to miss this year, precisely because the old date is burned into so many checklists.
The fee schedule is tiered on gross receipts. For the 2025-2027 registration cycle, fees are based on your 2025 San Francisco gross receipts and range from $55 for businesses with $100,000 or less in receipts up to $60,000 for businesses above $200 million, plus a $4 state fee at every tier. A typical pre-seed or seed startup pays a two or low three figure amount; the online portal calculates the exact fee when you file.
Registration is also the gateway obligation: it is how the city knows you exist, and an unregistered business that surfaces later can face back fees and penalties.
SF Gross Receipts Tax: The Prop M Rewrite
The gross receipts tax (GRT) is San Francisco's main business tax. In November 2024, voters passed Proposition M, which rewrote the system effective January 1, 2025, and the 2026 filing season is the first fully under the new rules. What Prop M means for startups:
The small business exemption jumped to $5 million. Previously, businesses under $2.25 million in SF gross receipts were exempt. Prop M raised the ceiling to $5 million in combined San Francisco gross receipts (lessors of residential real estate are the main carve-out). Below that line you owe no GRT, and starting with the tax year 2025 filing due March 2, 2026, most exempt businesses do not file the GRT return at all. This is the headline: the large majority of pre-seed through Series A startups owe San Francisco a registration fee and nothing else.
Rates were restructured into seven business activity categories. Rates are progressive within each category and range from 0.100 percent at the bottom of the retail and wholesale category to 3.360 percent at the top of financial services. Where you land depends on your activity classification and receipts level; the Treasurer publishes the full schedule. Above $5 million, get your category right, because the spread is large.
The filing merged and moved. The GRT return for tax year 2025 is filed inside the same unified form as registration renewal, due March 2, 2026. An extension to November 30, 2026 is available only if you request it and pay in by the original deadline; the Treasurer requires 110 percent of prior year liability with the request. The extension moves the paperwork, not the cash.
Quarterly estimates continue for larger payers. Businesses above the exemption make estimated GRT payments on April 30, July 31, and October 31, with the balance due at the annual filing. Under the $5 million exemption you owe no GRT and correspondingly no estimates. If you made estimated payments and then finished 2025 at or under $5 million, you can still file to trigger your refund.
Watch the threshold as you scale. The $5 million line is measured on San Francisco gross receipts, not total revenue. A $12 million ARR company with a distributed team and modest SF-sourced receipts may still be under it; an SF-concentrated company crosses earlier. Model this before year end, not at filing time.
Homelessness Gross Receipts Tax and Overpaid Executive Tax: Briefly
Two additional city taxes exist; for most startups the only thing to know is the threshold that keeps you out of them.
Homelessness Gross Receipts Tax (HGR). After Prop M, this applies to businesses with more than $25 million in San Francisco gross receipts in a business activity category (the threshold was previously $50 million), at rates from 0.162 percent to 1.640 percent layered on top of the regular GRT. Sub-$25 million startups are out of scope.
Overpaid Executive Gross Receipts Tax (OE). This surtax targets companies whose highest paid managerial employee earns more than 100 times the median compensation of their San Francisco employees. Prop M narrowed it substantially: businesses with 1,000 or fewer US employees and $1 billion or less in gross receipts are exempt, and rates now run from 0.020 percent to 0.129 percent. Practically no startup below late growth stage will touch it.
Both are filed, when applicable, on the same unified form due March 2, 2026.
The Payroll Expense Tax Is Gone. Really.
A surprising amount of founder advice still references the San Francisco payroll expense tax. It no longer exists. Proposition F, passed in November 2020, fully repealed it and completed the city's transition from taxing payroll to taxing gross receipts, which began with Proposition E in 2012. It has not applied since tax year 2021. If a checklist, an older blog post, or an accountant unfamiliar with the city tells you to budget for SF payroll tax, that information is stale. Payroll can still matter for apportioning gross receipts to the city, discussed below, but there is no separate tax on payroll expense.
Form 571-L: The Business Property Statement Founders Forget
San Francisco, like every California county, taxes business personal property: the computers, servers, lab equipment, and furniture your company owns or leases in the city. The Assessor-Recorder discovers that property through Form 571-L, the business property statement. The 2026 mechanics:
- April 1, 2026: the 571-L is due, reporting the cost of business property you held as of the January 1 lien date.
- May 7, 2026: the last day to file without penalty. Statements postmarked after May 7 take a 10 percent penalty under Revenue and Taxation Code section 441(b).
- July 2026: the Treasurer mails the unsecured property tax bill based on your reported (or estimated) values.
- August 31, 2026: payment is due; after that it is delinquent and accrues penalties.
Who must file: any business whose taxable personal property has an aggregate cost of $100,000 or more, and any business the Assessor sends a notice to, regardless of size. Once you register with the city, the Assessor knows about you and notices are common, so treat a request to file as mandatory even if your equipment is modest. San Francisco has historically exempted very small holdings (on the order of $4,000 in value, under a 1997 city ordinance), but confirm with the Assessor rather than self-determining an exemption.
The classic failure mode is silence: a startup ignores the 571-L, the Assessor estimates values on its behalf (rarely in the startup's favor), adds penalties, and the founder meets the obligation for the first time as an escape assessment during diligence. The tax itself is usually small for a software company. The mess from not filing costs more than the tax.
The California Layer
SF startups also carry state obligations that a Delaware-registered, remote-first company might not have prioritized. Our Delaware C-corp startup tax guide covers how the Delaware and federal pieces fit; here is what California adds.
The $800 minimum franchise tax. Every corporation doing business in California owes franchise tax, with a floor of $800 per year, profitable or not. Corporations that incorporated or registered on or after January 1, 2020 are exempt from the minimum tax in their first taxable year (they still owe regular tax measured by income, at the 8.84 percent corporate rate, if profitable). From year two onward, the $800 is effectively due with your first estimated payment on April 15. Missing it is the most common California mistake we see, edging out even the Delaware confusion covered in our Delaware franchise tax resource.
Form 100 and its unusual extension. The California corporation return, Form 100, is due April 15, 2026 for calendar year filers, same day as the federal Form 1120. California grants an automatic seven month filing extension, no form required, landing on November 16, 2026 because November 15 is a Sunday. The extension does not extend payment; tax owed is due April 15.
Quarterly estimates are front-loaded. California corporate estimates are due April 15, June 15, September 15, and December 15, but unlike the federal even split, the installments are weighted 30 percent, 40 percent, 0 percent, and 30 percent of the year's estimated tax. Corporations subject to the minimum franchise tax must cover it in the first installment. If you mirror your federal estimate schedule into California, you will underpay the first half of the year.
The California R&D credit. California offers a credit equal to 15 percent of qualified research expenses above a base amount (plus 24 percent for qualifying university-based research), claimed on FTB Form 3523. It is nonrefundable and carries forward, which suits pre-revenue startups accumulating credits for profitable years. Recent state budget legislation has imposed temporary caps, most recently $5 million per year, on total business credit usage through 2026, so have your CPA confirm current-year limits before building the credit into your model.
CDTFA registration and the 2027 SaaS change. If you sell or lease tangible personal property in California, you need a seller's permit from the CDTFA and must collect sales tax. Pure SaaS and electronically delivered software have historically not been taxable in California, so most software startups have never registered. That is about to change: SB 122, enacted June 29, 2026, extends sales and use tax to digital products including prewritten software and SaaS beginning January 1, 2027, with carve-outs for custom software and certain categories. If you sell SaaS to California customers, use 2026 to get ahead of registration, tax engine configuration, and contract language, and watch CDTFA guidance as the date approaches.
Remote and Hybrid Teams: When Do You Owe San Francisco Anything?
The obligations above attach to businesses "engaging in business" in San Francisco, a definition broader than having a leased office. You are generally in scope if you maintain a fixed place of business in the city, if employees or agents perform work (including sales activity) there on all or part of seven or more days in a calendar year, or if your SF-sourced receipts exceed an economic nexus threshold the city indexes annually (a bit over $2 million recently; confirm the current figure with the Treasurer).
Practical implications for 2026-era teams:
- A hybrid office in SF means you are in. Register, renew, and evaluate the GRT threshold, even if most of the team is remote.
- Employees working from SF homes count. A fully remote company with two engineers living in the city can have nexus through their work performed there. That does not necessarily mean material tax, since receipts get apportioned, but it does mean registration.
- Apportionment determines the damage. Only receipts attributable to San Francisco count toward the $5 million exemption and the tax base. Prop M also shifted many industries' apportionment formulas away from payroll and toward sales, which tends to help SF-headquartered companies whose customers are everywhere. The mechanics are category-specific; this is a CPA conversation once you approach the threshold.
- Leaving the city does not erase the year. If you had nexus for part of 2026, you have 2026 obligations. Wind down cleanly with final filings and registration closure.
This pattern, a company physically light in one city but with people and customers scattered across many, is exactly where local obligations slip. It is common in the AI cohort concentrated in San Francisco right now, which is why we built a dedicated practice for AI startups and why multi-state and multi-city compliance tracking is a standard part of the StartupCFO tax service rather than an add-on.
The Classic SF Founder Mistakes
- Renewing registration on the old May 31 clock. The 2026 deadline is March 2. This is new, and it will catch thousands of businesses.
- Assuming the payroll expense tax still exists. Repealed since 2021. Citing it in a diligence answer signals stale books.
- Ignoring the 571-L. The Assessor will estimate for you, with penalties. File by May 7 even when your equipment list is one page.
- Reading the $5 million exemption as "nothing to do." You still register annually, handle the 571-L when required, and owe state filings.
- Skipping the California minimum franchise tax in year two. The first-year exemption creates a false sense of rhythm; the $800 plus penalties shows up later with interest.
- Mirroring federal estimate percentages into California. The 30/40/0/30 schedule means April and June carry 70 percent of the year.
The Bottom Line for Sub-$5M Startups
If your San Francisco gross receipts are at or under $5 million, your 2026 city obligations are, in most cases: renew registration and pay a modest fee by March 2, file the 571-L if you hold reportable property or the Assessor asks, and pay the resulting bill by August 31. No gross receipts tax, no Homelessness tax, no Overpaid Executive tax, and no payroll expense tax.
The obligations are cheap. Missing them is not, because penalties, escape assessments, and stale-compliance findings surface at the worst possible moment: mid-fundraise. If you would rather have every federal, state, and city deadline tracked and filed with CPA sign-off, that is what our tax and compliance service does. Book a free consultation and we will map your specific footprint.
This article is general information, not tax advice. Rates, thresholds, and deadlines change, and city and state agencies publish the controlling figures. Confirm your specific obligations with your CPA and the official pages at sftreasurer.org, sfassessor.org, ftb.ca.gov, and cdtfa.ca.gov before filing.
