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> they would be effectively "double taxed" since by definition a tax on "gross receipts" would be a tax on the entire transaction amount once and on the ~2.9% t

> they would be effectively "double taxed" since by definition a tax on "gross receipts" would be a tax on the entire transaction amount once and on the ~2.9% transaction fee again. Citation please? Dorsey said they’d be taxed more than Salesforce but I assumed that’s because of where geographically they book their revenue.

dawhizkid 8y ago
https://www.sfchronicle.com/business/article/Dorsey-tweetstorm-bashes-Prop-C-SF-measure-to-13321053.php https://www.sfchronicle.com/business/article/Dorsey-tweetsto... Square has said that a quirk of the proposed tax could harm it and other San Francisco payments companies like Stripe. Gross receipts taxes are applied to a company’s total revenue generated from business activities in the city. In Square’s case, those include fees it splits with banks and Visa and MasterCard when it processes credit-card transactions. Square, which is publicly traded, reports both net revenue, which includes those fees, and adjusted revenue, which excludes them. In the second quarter, those figures were $815 million and $385 million respectively. In Square’s view, imposing a tax on the higher revenue measure hurts it disproportionately. If I'm reading this correctly, basically payment companies like Square and Stripe are disproportionately hurt because they would pay the tax on the ~2.9% + 10 cent fee they collect even though in reality both companies only keep a small fraction of that fee since most of that fee goes to the networks like Visa/MC/Amex.
- abalone 8y ago
  Yes.. earlier you said the entire transaction amount and a double tax. That’s probably not accurate. As for adjusted revenue, do we actually know for certain that gross receipts applies to net revenue and not adjusted? Or is Dorsey just “hypothetically” spreading FUD?
  - dawhizkid 8y ago
    They are essentially paying a tax on behalf of Visa/MC/Amex (none of which are HQ'd in SF). It's actual more than a "double tax" since more than 50% of the processing fee is split with them but not a literal "double tax" imposed by SF. Gross receipts is all revenue not including any cost or expense https://www.investopedia.com/terms/g/gross-receipts.asp https://www.investopedia.com/terms/g/gross-receipts.asp

dawhizkid 8y ago

https://www.sfchronicle.com/business/article/Dorsey-tweetstorm-bashes-Prop-C-SF-measure-to-13321053.php https://www.sfchronicle.com/business/article/Dorsey-tweetsto... Square has said that a quirk of the proposed tax could harm it and other San Francisco payments companies like Stripe. Gross receipts taxes are applied to a company’s total revenue generated from business activities in the city. In Square’s case, those include fees it splits with banks and Visa and MasterCard when it processes credit-card transactions. Square, which is publicly traded, reports both net revenue, which includes those fees, and adjusted revenue, which excludes them. In the second quarter, those figures were $815 million and $385 million respectively. In Square’s view, imposing a tax on the higher revenue measure hurts it disproportionately. If I'm reading this correctly, basically payment companies like Square and Stripe are disproportionately hurt because they would pay the tax on the ~2.9% + 10 cent fee they collect even though in reality both companies only keep a small fraction of that fee since most of that fee goes to the networks like Visa/MC/Amex.

abalone 8y ago
Yes.. earlier you said the entire transaction amount and a double tax. That’s probably not accurate. As for adjusted revenue, do we actually know for certain that gross receipts applies to net revenue and not adjusted? Or is Dorsey just “hypothetically” spreading FUD?
- dawhizkid 8y ago
  They are essentially paying a tax on behalf of Visa/MC/Amex (none of which are HQ'd in SF). It's actual more than a "double tax" since more than 50% of the processing fee is split with them but not a literal "double tax" imposed by SF. Gross receipts is all revenue not including any cost or expense https://www.investopedia.com/terms/g/gross-receipts.asp https://www.investopedia.com/terms/g/gross-receipts.asp