# Tax

#### San Francisco Gross Receipts Tax <a href="#block-af042a4aae5f4b9b95f63089af99b3f5" id="block-af042a4aae5f4b9b95f63089af99b3f5"></a>

The San Francisco Gross Receipts Tax is a tax on businesses based on their gross receipts. It was approved by San Francisco voters in 2012 and replaced the city's payroll tax. The tax rate varies depending on the business's industry and revenue size. Businesses with low gross receipts may be exempt from the tax. The tax revenue is used to fund city services and programs.For the 2025 tax year, the return is only due for companies with more than $5,000,000 in gross receipts (or revenue).This tax is not applicable for OCV in 2025 - we can disregard reminders in our payroll system.For more information: <https://sftreasurer.org/business/taxes-fees/gross-receipts-tax-gr>&#x20;

#### Portfolio Company Tax Process <a href="#block-2bdfeb7b074d80398dc7e48a1b22a7c0" id="block-2bdfeb7b074d80398dc7e48a1b22a7c0"></a>

Taxes are processed in collaboration with tax advisory firm and Finance Team. Create a tracker in Shared Drive under Finance and Compliance Operations folder.\
1\. Engagement letters with tax advisory are signed in December (CTOs can sign; if no CTO, OCV signs as CEO)\
2\. Finance Team provides PBC items to Tax Advisory before 1/31.\
3\. Tax Advisory provides draft returns for Finance Team to review in February and March.\
4\. Taxes are filed before 4/15.&#x20;

#### Fund Tax Process <a href="#block-2bdfeb7b074d80e897e6eb70c219ae69" id="block-2bdfeb7b074d80e897e6eb70c219ae69"></a>

Fund Taxes are processed by tax advisory firm.

1. Sign engagement letter in December
2. Review fund financials by January 31st.
3. Send out Schedule K-1’s and file fund return by March 15th.

#### Additional State Tax Return Filing

It is ultimately managements decision to file in additional states beyond DE and CA (if officer resides elsewhere). If portfolio company doesn’t file in these states, the states could identify the physical nexus and send a notice looking for their filing. At that point, tax preparer could file the missing returns.

Historically, from none of these states charge a penalty for not filing (especially for a loss generating entity). Nor is there a minimum tax they will be looking for. Furthermore, there is likely no loss allocation so it is merely filing a zero return, except paying tax preparer fee to prepare the returns.

Recommendation is to only file where there is a minimum tax requirement (including WI, NY) and not file otherwise.\ <br>

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