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Is there anything specific in Prop C to financial services companies? I thought the only criteria was making over $50M in revenue, and GMV would not be relevant
by jameslevy 7y ago
Is there anything specific in Prop C to financial services companies? I thought the only criteria was making over $50M in revenue, and GMV would not be relevant to the calculation.
- ummonk 7y agoFinancial services companies often have low margins against their revenues, so the tax disproportionately hits them relative to earnings.
- ian0 7y agoI would have thought the opposite. Margins tend to be high in financial services, revenue tends to be tiny. The value of payments / GTV is huge, but the taxable component is the fees themselves?
- vertoc 7y agoYeah but Stripe doesn’t get to keep most of those fees - it’s mostly interchange which goes to Visa which is then distributed to the issuing bank of the credit card
- ian0 7y agoYeah but you don't book other peoples fees as your own revenue. VISA has a profit margin of 54%. Surely they are not counting the entire interchange cost (of which they receive a v. small percentage) as revenue.
- scarejunba 7y agoAFAIK they count the entire processing fee as revenue. It sort of makes sense. If I were to make a service on top of Twilio and charge you 1% more than Twilio, then I have to count the whole amount you're paying me as revenue and the whole amount I'm paying Twilio as a cost. That's just as logical as if I were to build a value-added service on top of AWS, or if I bought things on Alibaba and then sold them in America.
- enahs-sf 7y ago"It will charge corporations with revenue above $50 million about 0.5 percent in gross receipts tax, with the proceeds going entirely toward homeless programs" https://www.sfchronicle.com/politics/article/SF-Prop-C-homeless-tax-measure-to-raise-300-13369555.php https://www.sfchronicle.com/politics/article/SF-Prop-C-homel...
- solidsnack9000 7y agoGross receipts for payment processing are very high relative to actual revenue. They product moving in not directions is money, after all.
- solidsnack9000 7y ago“...in not directions...” -> “...in both directions...”