In a bold legal move, General Motors has filed a lawsuit against the city of San Francisco, claiming they've been overtaxed to $108 million. The automotive giant seeks a hefty refund for seven years of taxes, including an additional $13 million in penalties and interest. The suit, initiated last Friday in the California Superior Court, challenges San Francisco's method of calculating taxes, spotlighting the relationship between GM and its self-driving car subsidiary, Cruise, which is based in the city.
According to Reuters, GM insists that Cruise operates independently and should not influence the tax duties of GM in San Francisco, where it boasts minimal activity. Weighing in on the matter, GM argued that it only sold approximately $677,000 worth of goods in the city during the previous year. In the grand scheme of GM's massive $156.7 billion annual sales report, the city's claim is but a fraction, yet the lawsuit comes as San Francisco forecasts an $800 million budget deficit looming in the near future.
A spokesperson from General Motors declined to comment on the pending legal matter, maintaining the company's usual stance on litigation. Meanwhile, the San Francisco City Attorney's Office has acknowledged receipt of the lawsuit and noted that it will respond through the proper legal channels. "We are reviewing the complaint and will respond in court," a representative for the office stated, as reported by NBC Bay Area.
GM's legal argument centers around the California Government Code, which stipulates that the city's taxes must accurately reflect the business level conducted within city limits. "The California Government Code mandates that city taxes must fairly reflect the proportion of activity carried on within the city, and they do not, either generally or as applied to GM," the company asserted in its complaint. This allegation comes at a time when Cruise has notably scaled back its operations following an accident in October that heightened regulatory scrutiny and led to a temporary suspension of its fleet on U.S. roads — a detail mentioned in the lawsuit to support the claim that Cruise's financial impact on GM's operations is limited.
The full complaint, which outlines GM's grievances and the basis for the refund request, has been made available publicly and can be accessed via a document hosted on DocumentCloud.
