Get 40% Off
🔥 This hedge fund gained 26.16% in the last month. Get their top stocks with our free stock ideas tool.See stock ideas

GM sues San Francisco, seeking $121 million in back taxes, penalties

Published 12/27/2023, 06:24 PM
Updated 12/27/2023, 06:30 PM
© Reuters. FILE PHOTO: The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, U.S., March 16, 2021. Picture taken March 16, 2021.  REUTERS/Rebecca Cook/File Photo
GM
-

By Greg Bensinger

SAN FRANCISCO (Reuters) - General Motors (NYSE:GM) has sued the city of San Francisco, seeking to recover more than $100 million, alleging that it was charged a higher tax bill than warranted because its Cruise self-driving car unit was improperly used to make the calculations.

In the case filed in California Superior Court in San Francisco, GM is seeking $108 million in back taxes over the course of seven years, as well as $13 million in penalties and interest, according to the complaint. The Detroit automaker said San Francisco-based Cruise is operated separately from GM, generates only a minimal amount of sales and should not be used to calculate GM’s liabilities in the city where the parent company has a limited presence. GM said in the lawsuit that it sold only about $677,000 worth of goods in San Francisco in 2022.

The lawsuit was filed on Friday. Bloomberg reported the news earlier on Wednesday.

Neither the San Francisco city attorney’s office nor GM immediately responded to requests for comment.

While the funds would represent a small portion of GM’s reported $156.7 billion in sales in 2022, the lawsuit comes as San Francisco is projecting an $800 million budget deficit over the coming two fiscal years amid a pandemic recovery that has stalled. Mayor London Breed has asked city agencies to cut their budgets by 10% to help close the gap.

“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 company wrote in its complaint.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

The Cruise unit at issue is contracting after an October accident in San Francisco that caused a furor in the city and caught the attention of regulators. The incident has caused Cruise to pull its U.S. cars off roads, undergo a safety review and cut nearly a quarter of its staff nationwide.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.