Tax Negotiation - Tax Debt Relief

Examiner Staff Writer
03/27/09 3:00 AM PDT

Source: sfexaminer.com

SAN FRANCISCO — Businesses shouldering one heavy tax burden may now have a way to lighten their loads.

Amid the economic downturn, the nearly 9,000 businesses on the hook for a payroll tax in San Francisco can obtain relief under a new program launched Thursday by The City’s tax collector.

Payroll taxes collected by The City are based on the number of workers employed by a business. The amount of the tax, which is paid throughout the year in installments, is based on a company’s previous year’s payroll.

With the nation’s economy in turmoil, some businesses that have decreased the number of employees on their payroll will still be paying tax amounts based on the higher number of employees they had last year.

City Treasurer Jose Cisneros said Thursday that if a business can prove to his office that its payroll has decreased below that amount it can pay a reduced fee.

“If a business’s payroll is shrinking this year, the last thing The City wants to do is collect too much payroll taxes,” Cisneros said.

The program is intended to ensure businesses that experienced a decline in payroll will be able to hold on to the money during the most difficult economic times instead of paying it out now only to receive a refund in about a year.

Cisneros said the program was established to “provide tax relief to San Francisco businesses that are facing a financial downturn.”

“We all know we are in a recession,” he said. “We want to do everything we can to be responsive to our business community.”

Board of Supervisors President David Chiu praised the program for helping to keep cash in the hands of business owners during one of the worst economic downturns The City has experienced.

Jim Lazarus, senior vice president of public policy for the San Francisco Chamber of Commerce, praised the program as a change in tone at City Hall.

“This is part of a larger group of legislation and initiatives by The City that the chamber is very supportive of,” Lazarus said.

Mayor Gavin Newsom also supported the plan.

“This is one of a series of steps The City is taking to assist businesses in this difficult economic environment,” he said in a press release. “I’m glad the treasurer can offer assistance to our local business community.

In order to qualify, businesses must request a reduction by explaining “the facts and circumstances relating to the anticipated reduction” in writing to the Treasurer’s Office. Any change in the amount due is effective only when a business receives a written notice of approval.

“It’s critical that taxpayers continue to pay the prepayment amount we ask them to pay until we notify them otherwise,” Cisneros said.

If you are an Employer looking to take advantage of this new provision, the professionals at eTaxRelief are happy to assist you. Contact us today for a free tax consultation.