I’ve been getting a lot of questions recently about Proposition M, which was passed in early November. This is a significant change, so here’s a breakdown:

What is Prop M?

Prop M eliminates the gross receipts tax for businesses with gross sales of $5 million or less. Previously, the threshold was just over $2 million, meaning businesses making up to $2 million were not subject to this tax. With the new increase to $5 million, this is a major win for many businesses, especially restaurants, as it means fewer businesses will be burdened by this tax.

What else does Prop M cover?

Along with eliminating the gross receipts tax for qualifying businesses, Prop M also repeals a host of other fees related to business licenses and permits. These repeals will reduce the financial strain on restaurant owners and small business operators, making it easier for them to reinvest in their operations and continue providing great service to their customers.

Why is this good news for restaurants?

The increased threshold for the gross receipts tax means that more restaurants, especially smaller ones, will not have to pay this tax. And with the repeal of other license fees, it opens up more opportunities for businesses to thrive in an already competitive market. This could also make it easier for owners to scale their businesses without the fear of increasing tax burdens as they grow.

Got questions?

If you have any questions about how Prop M affects your restaurant or need help navigating these changes, feel free to reach out. I’m here to help for all tax and accounting questions