Corviniti Accounting in San Francisco

Technical accounting and reporting. Revenue under ASC 606, leases under ASC 842, equity compensation, SAFEs and convertible notes, preferred stock classification, business combinations, and the memos an auditor will accept without rework. IPO and SPAC readiness. The gap between private-company books and an effective registration statement: the PCAOB audit uplift, cheap stock analysis, segment and EPS mechanics, the control environment, and a close process that meets a public company's deadlines. Operating finance. Fractional CFO work, board and investor reporting, budget and burn models, and outsourced accounting for companies that are not ready to hire in-house. Cleaning up books during diligence costs considerably more than keeping them clean, which is most of the argument for doing this early.

The $800 minimum franchise tax is owed annually by essentially every corporation, LLC, LP, and LLP for the privilege of doing business in California, regardless of profit or loss. Registering in Delaware does not avoid it if you operate here. C corporations pay 8.84 percent franchise tax on net income above that floor. S corporations pay 1.5 percent at the entity level on California-apportioned income, so unlike most states California taxes the company as well as the owners. LLCs owe an annual LLC fee on top of the $800, set by California total income, which is gross income plus cost of goods sold: $900 from $250,000, $2,500 from $500,000, $6,000 from $1 million, and $11,790 above $5 million. Because it is measured before costs come out, a high-volume low-margin business can reach the top tier in a year it loses money. Most practitioners call it the gross receipts fee; the Franchise Tax Board calls it the LLC fee. The pattern is consistent: these charges key off existence and revenue, so a pre-revenue company still owes California money. See the Franchise Tax Board for current amounts.

The entity elects, pays California tax of 9.3 percent on qualified net income, deducts that state tax federally, and each electing owner claims a credit against their California personal return. The election is available through tax year 2030 and is made annually. The mechanic most often missed is the June 15 prepayment, due at the greater of 50 percent of the prior year's elective tax or $1,000. It falls in the middle of the tax year, so the decision has to be made in advance. SB 132 extended the election through 2030 and softened the consequence of getting the payment wrong: from 2026 a missed or short prepayment no longer voids the election outright, and instead each owner's credit is reduced by 12.5 percent of that owner's share of the underpaid amount. Better than the old all-or-nothing rule, still expensive. The election is most valuable where owners sit in California's top brackets, and it is not automatically worth making, so we model it per owner before electing.

Everything goes on one annual filing with the Treasurer and Tax Collector, due March 2, 2026 for the current cycle: the business registration renewal plus every city tax that applies. Proposition M, effective January 2025, raised the small business exemption from $2,250,000 to $5,000,000 of combined San Francisco gross receipts, and it covers both the Gross Receipts Tax and the Overpaid Executive Tax. It also cut the number of business categories from fourteen to seven and shifted apportionment toward sales, which means both your category and your bill may have changed. Above that threshold the Gross Receipts Tax applies, charged on revenue, so a loss-making company can owe it. The Homelessness Gross Receipts Tax threshold dropped from $50 million to $25 million starting 2025, with rates from 0.164 to 1.640 percent. The Overpaid Executive Tax runs 0.02 to 0.129 percent and is driven by the pay ratio at any profit level. There is also a Commercial Rents Tax on rent received from commercial property in the city. An extension runs to November 30, which now lines up with the California deadlines, but it has to be requested and paid by the March deadline, generally at 110 percent of the prior year's liability for each tax type. Sales tax in San Francisco is 8.625 percent combined, made of the 7.25 percent statewide rate and 1.375 percent of district taxes.

California's top marginal rate is 13.3 percent on income above $1 million, and there is no preferential rate for capital gains, which are taxed as ordinary income. That makes the timing of a sale and where you live when it closes worth real money. Equity compensation is allocated by workday: California taxes the portion of an award earned while you were working in the state, whatever your address is when it vests, so the allocation needs documenting while it happens and not reconstructing years later at exercise. Property tax works the other way. Proposition 13 anchors assessed value at purchase and caps increases at 2 percent a year until the property changes hands, so a long-held home carries a low bill and a purchase resets it. State Disability Insurance is easy to overlook and no longer small: the rate is 1.3 percent for 2026 and, since 2024, there is no wage ceiling, so it applies to every dollar of wages. On a $600,000 salary that is $7,800 a year, where the old cap would have stopped it well before. And California, like New York, examines departures and can continue taxing California-source income after you go. Day counts and the paper trail behind a move decide those cases.

Venture-backed technology companies. SaaS and usage-based revenue under ASC 606, SAFEs and convertible notes, preferred stock and warrant classification, equity compensation, and the accrual books a Series A diligence process expects. This is the core of the office.

Companies approaching the public markets. S-1 preparation, the PCAOB audit uplift, cheap stock, segment reporting, and the close calendar an SEC filer has to keep. Also the SPAC and de-SPAC accounting that sits alongside it.

Fintech and digital assets. Gross versus net revenue presentation, custody and safeguarding questions, and the reporting positions that draw the most auditor attention.

Life sciences. Research and development cost accounting, collaboration and milestone arrangements, and grant revenue recognition.

Professional services and agencies. Unbilled work in progress, the PTE election decision, and the San Francisco gross receipts filing, which reaches service firms well before it reaches most product companies.

Our service pages cover IPO readiness, ASC 606 revenue recognition, ASC 842 lease accounting, and fractional CFO services. For companies with a New York footprint as well, see our New York City office page. Corviniti is an accounting advisory firm and not a CPA firm, so we do not perform audits, reviews, or compilations; on an IPO or a priced round we work alongside the audit firm.