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GM Sues San Francisco Over Tax Bill

GM is seeking $121 million in back taxes and penalties in a new lawsuit filed against the city of San Francisco. The automaker alleges that the city inflated tax bills by including Cruise, General Motors’ self-driving technology division, in tax calculations. General Motors argues that Cruise operates separately and contributes minimally to sales, and thus should not be included in the automaker’s tax bill to San Francisco.

A Cruise autonomous vehicle in San Francisco.

According to a recent report from Reuters, the new GM lawsuit was filed in the California Superior Court in San Francisco, and outlines $108 million in back taxes accumulated over seven years, plus $13 million in penalties and interest. The lawsuit stipulates that General Motors sold just $677,000 worth of goods in San Francisco during the 2022 calendar year, highlighting the automaker’s limited presence there.

“The California Government Code mandates that the city taxes must fairly reflect the proportion of activity actually carried on within the city, and they do not, either generally or as applied to GM,” the automaker wrote.

At the center of the controversy is Cruise, which faced increased scrutiny in October following an accident wherein a pedestrian was trapped under a Cruise autonomous vehicle after she was struck by a human-driven vehicle, resulting in serious injuries.

The incident led to a suspension of GM’s driverless operations permit in the city of San Francisco and a massive overhaul of the entire company, including a pause on Cruise’s autonomous fleet operations, an investigation by the NHTSA, an investigation into Cruise’s business practices, a 24-percent reduction to the company’s workforce, and the resignation of the company’s CEO, Kyle Vogt, as well as the resignation of company co-founder and CPO, Daniel Kan. Cruise is now scaling back on its ambitions with a reduced budget, with hundreds of millions cut in operating costs.

Meanwhile, Reuters reports that the city of San Francisco projects an $800 million budget deficit over the next two fiscal years amid a stalled post-pandemic recovery.

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Jonathan is an automotive journalist based out of Southern California. He loves anything and everything on four wheels.

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Comments

  1. Could not happen to a better company.

    Reply
    1. Whether you “like” a company or not, taxes should be collected based on the rules in place. It is one of the primary requirements of a functioning democracy. If SF overcharged gm, gm should get a rebate.

      Reply
  2. Then get completely out of Crazyfornia!

    Reply
  3. Unfortunately, the article completely misses the story. Why does SF believe GM owes so much? Sales in SF for one year don’t tell the story of all of the years in dispute. An accident with a Cruise vehicle doesn’t tie back to the story at all (but does fill space with little writing effort). Nothing in the story beyond the headline.

    Reply
  4. Two mega-liberal tax money grabbers duking it out in tax court. They will both bring their big gun legal team and will settle out of court and again the lawyers will win.

    Reply
  5. SF needs the $$$ to pay for penicillin, HIV drugs, free housing, free food and “self-medication” for the 70% of its welfare state population .

    Reply
  6. Dumb city in a dumb state with a dumb idea for transportation. What could go wrong?

    Reply
  7. Crooks suing looks.
    F GM.
    Thousands of ex Lordstown, Warren and Baltimore GM employees are still waiting for GM to make restitution for violations to agreements GM made to employees.
    An independent arbitrator states that GM was wrong but Mary and company refuses to pay.

    Reply
  8. Crooks suing kooks.
    F GM.

    Reply
  9. Excellent article! This case sounds interesting.

    Reply

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