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Stripe to move to South San Francisco

sfchronicle.com

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Re: Stripe to move to South San Francisco

#71

Post by nrp »

dmode wrote: post #58
cjlars wrote: post #5

Articles misses that this is in response to SF's gross receipts tax. Payment processing is an ultra low margin business, no way they can compete while paying ~1% of revenues to the city.

I believe it is gross receipts within the City. The impact is surely negligible

San Francisco has probably the most complex payroll and gross receipts tax system of any city in the world. The calculator you're supposed to use is: https://sftreasurer.org/sites/default/files/2019-08/BT_2019%...

The item specifically relevant to Stripe is that it's categorized as a Financial Services rather than Information company. Financial Services companies have to allocate gross receipts based 50% on their payroll location and 50% based on their sales location. So while their portion of sales in San Francisco is negligible, most of their payroll is there.

Re: Stripe to move to South San Francisco

#72

Post by aeternum »

lukeschlather wrote: post #45
MuffinFlavored wrote: post #8

Earlier quoted context omitted.

Payment processing rates in China are ____ Payment processing rates in USA are ___ Can somebody help me double check something? I don’t know the answers to those questions I feel like I read WeChat processes payments at 0.1% while Stripe/PayPal are still around 2%

I have a credit card that gives me 1.5% cash back on every transaction. I'm reading that Visa typically charges 2.3% to merchants, and Stripe charges 2.9%, ignoring per-transaction fees. So Stripe itself probably gets around 0.6% of each transaction, and at least on average 1% of each transaction goes to cardholder bonuses, and the card issuer gets around 1.3%. Of course both Stripe and the issuer have some fraud pre…

Card not present transactions (the type primarily used by Stripe) are charged at a significantly higher rate due to the higher likelihood of fraud.

To use square as an example, card present is 2.6% whereas card not present is 3.5%.

Re: Stripe to move to South San Francisco

#73

Post by novok »

forthwall wrote: post #19

Kilroy Oyster Point is a pretty inaccessible area from San Francisco, you would need to take a limited train via Caltrain that's around 40 minutes to get there. I'm pretty sure this is definitely a blowback from the gross receipts tax and nothing more, even for commuters from the Peninsula would still have to get to the really strange south SF station which is also only accessible via limited express...or commute int…

Yeah I'm wondering why not san bruno, which has fairly accessible caltrain and bart stations in close vicinity of each other, and youtube is there which makes it a more attractive location commute wise.

Re: Stripe to move to South San Francisco

#74

Post by dmode »

nrp wrote: post #71
dmode wrote: post #58

Earlier quoted context omitted.

I believe it is gross receipts within the City. The impact is surely negligible

San Francisco has probably the most complex payroll and gross receipts tax system of any city in the world. The calculator you're supposed to use is: https://sftreasurer.org/sites/default/files/2019-08/BT_2019%... The item specifically relevant to Stripe is that it's categorized as a Financial Services rather than Information company. Financial Services companies have to allocate gross receipts based 50% on their pay…

I have a hard time believing most of their payroll is here. Strip is fairly disturbed and probably has huge ops and customer service teams in low cost locations. Their payroll footprint in the city, while significant, will not be burdensome when it comes to gross receipts

Re: Stripe to move to South San Francisco

#75

Post by JoshTriplett »

dvfjsdhgfv wrote: post #52
paxys wrote: post #41

The gross receipts tax was ridiculously misguided and is going to cause irreparable harm to the city's economy if not fixed. Square and other FinTech companies are most definitely next.

No, it's a very good move as many digital economy businesses are great at creative accounting making their net receipts look ridiculously small or negative.

And what about companies whose net receipts are actually small?

Re: Stripe to move to South San Francisco

#76

Post by dmode »

paulie_a wrote: post #68
taurath wrote: post #61

Earlier quoted context omitted.

I’ll be honest though. I’m not sure new housing can actually work to lower prices, with all the incentives for real estate locked towards ever increasing prices. Maybe over decades, while losing the entire feel of the city?

They'll be plenty house as talented people continue to flee. Meanwhile juniors flock. If a CEO of a sizable Corp can't get by without a roommate something is wrong. I certainly wouldn't work there for less than a half plus million a year. Shit weather and fog I'd rather work in North Dakota.

This is surely exaggerated right ? I know CEOs of large startups who live in mansions in Woodside, Berkeley, Mill Valley etc

Re: Stripe to move to South San Francisco

#77

Post by nrp »

dmode wrote: post #74
nrp wrote: post #71

Earlier quoted context omitted.

San Francisco has probably the most complex payroll and gross receipts tax system of any city in the world. The calculator you're supposed to use is: https://sftreasurer.org/sites/default/files/2019-08/BT_2019%... The item specifically relevant to Stripe is that it's categorized as a Financial Services rather than Information company. Financial Services companies have to allocate gross receipts based 50% on their pay…

I have a hard time believing most of their payroll is here. Strip is fairly disturbed and probably has huge ops and customer service teams in low cost locations. Their payroll footprint in the city, while significant, will not be burdensome when it comes to gross receipts

Payroll tax is based on apportionment of payroll expense, rather than headcount. It also includes stock based compensation. I'd guess most of their payroll expense is in San Francisco.

Re: Stripe to move to South San Francisco

#78

Post by heymijo »

I find myself confused about the new tax and unwilling to invoke Cunningham’s Law to get clarity.

So I went to the source (I think) and it appears Stripe would have been taxed at 0.560% on its gross receipts. [0,1]

Assumptions: 1) Stripe would be classed as a “financial services” company per the law and subject to section 953.6 of the law 2) Stripe has gross receipts over $25 million

My confusion is the discussion of a 1% tax rate on gross receipts. I don’t see any business taxed at that rate and on this case neither Stripe nor Square would be.

[0] https://sftreasurer.org/business/taxes-fees/gross-receipts-t... [1] http://library.amlegal.com/nxt/gateway.dll?f=templates&fn=de...

Re: Stripe to move to South San Francisco

#79

Post by lacker »

taurath wrote: post #61
henrikschroder wrote: post #53

Earlier quoted context omitted.

> But people just kept screaming that he didn't care about homeless JFC, it's not because of a lack of money that SF has a problem with homeless people, and it's not that more money would make the problem magically go away.

I’ll be honest though. I’m not sure new housing can actually work to lower prices, with all the incentives for real estate locked towards ever increasing prices. Maybe over decades, while losing the entire feel of the city?

The feel of San Francisco is already lost, when a small single apartment runs $3000 a month.

Re: Stripe to move to South San Francisco

#80

Post by AdieuToLogic »

cjlars wrote: post #5

Articles misses that this is in response to SF's gross receipts tax. Payment processing is an ultra low margin business, no way they can compete while paying ~1% of revenues to the city.

> Payment processing is an ultra low margin business, no way they can compete while paying ~1% of revenues to the city.

Stripe charges %2.9 + $0.30 per transaction.

That is not an "ultra low margin" by any means in the CC processing domain. Actually, that is a massive markup when compared to other ISO's and VAR's.

Depending on the Merchant's processor and their volume, significance, and sophistication, their Discount Rate[0] is often well less than the %2.9 Stripe demands. The fact that Stripe also tacks on another $0.30 USD on top of the top-end Discount Rate for their transaction fee is insane (see here[1] and here[2] for some context and these don't even account for fee negotiations).

And to suggest "no way can they compete while paying ..." is to ignore Stripe has a valuation at/near $35,000,000,000 USD[3].

0 - https://www.creditcards.com/credit-card-news/glossary/term-d...

1 - https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-in...

2 - https://www.mastercard.us/content/dam/mccom/en-us/documents/...

3 - https://techcrunch.com/2019/09/19/stripe-is-raising-another-...

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