IMPOSITION OF TAX.
SF Business and Tax Regulations Code § 3003
in effectSEC. 3003. IMPOSITION OF TAX.
New Ordinance Notice
Publisher's Note: This section has been AMENDED by new legislation (Ord. 261-25 , approved 12/23/2025, effective 1/23/2026, retro. 1/1/2026). The text of the amendment will be incorporated under the new section number when the amending legislation is operative.
(a) Except as otherwise provided in this Article 30, for the privilege of engaging in Cannabis Business Activities in the City, the City imposes an annual Cannabis Business Tax on each person engaged in business in the City that receives gross receipts from Cannabis Business Activities attributable to the City.
(b) The Cannabis Business Tax shall be calculated in the following manner:
(1) The person or combined group’s first $1,000,000 of gross receipts attributable to the City from Cannabis Business Activities shall be exempt from the Cannabis Business Tax.
(2) The person or combined group’s gross receipts attributable to the City from the Retail Sale of Cannabis or Cannabis Products, including the amount exempt under Section 3003(b)(1), shall be multiplied as follows:
(A) by 2.5% for gross receipts in excess of the amount exempt under Section 3003(b)(1) and up to and including $1,500,000; and
(B) by 5% for gross receipts over $1,500,000.
(3) The person or combined group’s gross receipts attributable to the City from all Cannabis Business Activities other than the Retail Sale of Cannabis or Cannabis Products, including the amount exempt under Section 3003(b)(1), shall be multiplied as follows:
(A) by 1% for gross receipts in excess of the amount exempt under Section 3003(b)(1) and up to and including $1,500,000; and
(B) by 1.5% for gross receipts over $1,500,000.
(4) The Board of Supervisors may from time to time by an ordinance adopted by at least two-thirds of the members of the Board increase one or more of the rates provided for in Sections 3003(b)(2) and 3003(b)(3), except that no rate may increase more than 1% annually and no rate may exceed 7%. The Board of Supervisors may from time to time by an ordinance adopted by a majority of the members of the Board decrease one or more of the rates provided for in Sections 3003(b)(2) and 3003(b)(3). Any such adjustments in this Section 3003(b)(4) shall be effective no sooner than the tax year following the tax year in which the ordinance adjusting the rate is effective. The Controller shall prepare and submit a market analysis and impact report to the Board before the Board adjusts any tax rate under this Section 3003(b)(4).
(5) If a person or combined group has gross receipts attributable to the City from the Retail Sale of Cannabis or Cannabis Products and from Cannabis Business Activities other than the Retail Sale of Cannabis or Cannabis Products, the person or combined group’s Cannabis Business Tax shall be determined as follows:
(A) The person or combined group’s taxable gross receipts shall be determined on an aggregate basis first for gross receipts attributable to the City from Cannabis Business Activities other than the Retail Sale of Cannabis or Cannabis Products, and then for gross receipts attributable to the City from the Retail Sale of Cannabis or Cannabis Products;
(B) The $1,000,000 exemption in Section 3003(b)(1) shall be applied first to gross receipts attributable to the City from Cannabis Business Activities other than the Retail Sale of Cannabis or Cannabis Products, with any remaining portion of the exemption then applied to gross receipts attributable to the City from the Retail Sale of Cannabis or Cannabis Products;
(C) The rates applicable under Section 3003(b)(2) shall be determined by applying the rate scale commencing with the gross receipts attributable to the City from Cannabis Business Activities other than the Retail Sale of Cannabis or Cannabis Products; and
(D) The Cannabis Business Tax for the person or combined group shall be the sum of the liabilities calculated under Sections 3003(b)(2) and 3002(b)(3), determined in accordance with Sections 3003(b)(5)(A), 3003(b)(5)(B), and 3003(b)(5)(C).
(c) The imposition of the Cannabis Business Tax under this Section 3003 shall be suspended for the tax years 2021 through and including 2035.
(Added by Proposition D, 11/6/2018, Eff. 12/14/2018, Oper. 1/1/2021; amended by Ord. 240-20, File No. 201009, App. 11/25/2020, Eff. 12/26/2020; Ord. 231-21, File No. 211150, App. 12/17/2021, Eff. 1/17/2022, Retro. 1/1/2022; Ord. 247-22, File No. 221070, App. 12/9/2022, Eff. 1/9/2023, Retro. 1/1/2023; Ord. 261-25, File No. 250929, App. 12/23/2025, Eff. 1/23/2026, Retro. 1/1/2026)
Source: City and County of San Francisco, Charter and Municipal Codes (American Legal Publishing, codelibrary.amlegal.com)URL: https://codelibrary.amlegal.com/codes/san_francisco/latest/sf_business/0-0-0-49235Fetched: 11/1/2026