General Motors has filed a multi-million lawsuit against the city of San Francisco for allegedly miscalculating the automotive giant’s tax bill for the years 2016-2022.
General Motors (GM) is seeking to recover approximately $121 million in back taxes, penalties, and interest from San Francisco due to the city unfairly using its Cruise self-driving car division to calculate the company’s tax liability, according to a complaint filed in California Superior Court in San Francisco. GM said that Cruise operates as a distinct business entity and that GM conducted very little business in the city.
“GM’s core automotive business does not employ anyone in the city, has no plants or other physical locations in the City, has no dealerships in the city, and sells only a de minimis amount (approximately $677,000 in 2022) of retail goods in the city,” the complaint states.
Cruise was primarily engaged in research and development activities in San Francisco during the years covered in the lawsuit and only earned minimal revenue from its ride-hailing business, the San Francisco Chronicle reported.
GM said that linking the San-Francisco-based Cruise division with the parent company GM’s global revenue meant more than $3 billion was erroneously subjected to city taxes.
Overall, GM is seeking a $108 million tax refund over the course of seven years, as well as $13 million in penalties and interest for the miscalculation.
A spokesperson for San Francisco’s city attorney said Wednesday that the office was “reviewing the complaint” and would “respond in court.” A spokesperson for GM said the company doesn’t comment on legal matters.
Despite seeking a hefty tax refund for the alleged miscalculation, GM’s business operations seem to be in full swing. As reported by The Dallas Express, GM announced a $10 billion share buyback and a dividend increase of 33% beginning in January 2024.