California Tax Updates for 9/1
Update 1:
San Francisco will impose an additional employer tax on certain businesses, effective in 2022. Businesses affected are those in which the highest-paid managerial employee earns more than 100 times the median compensation of its employees. The tax rate will increase for every additional 100 times that the CEO’s pay exceeds the median worker’s pay. The extra tax maxes out when the ratio of CEO pay to worker pay reaches 600 to 1. The maximum tax on payroll is 2.4% or a surcharge on the gross receipts tax of up to 0.6%. Businesses that are exempt from San Francisco’s gross receipts tax, due to small business status, are also exempt from the pay ratio tax. Contact your Linkenheimer CPA with questions.
Update 2:
California’s Gig Worker law (Prop. 22), which passed in Nov. 2020, has been ruled unconstitutional. That law exempts app-based driving companies such as Uber and Lyft from a previously passed law, known as the 2020 ABC test. That test […]
