General Motors (GM) has taken legal action against the City of San Francisco, disputing a $108 million tax bill imposed on the automaker linked to its autonomous driving unit Cruise. GM contends that the tax assessment is unfounded, citing its limited operational presence in terms of sales and personnel within the city.
The lawsuit, filed in state court last week, highlights GM’s claim that the city erroneously linked its tax liability to its Cruise driverless car division, which is based in San Francisco, over a period of seven years from 2016 to 2022. GM argues that Cruise, its autonomous vehicle technology software company, operates as a distinct business entity and should not be directly tied to the automotive giant’s global revenue.
In the complaint, reported by the San Francisco Chronicle, GM stresses that its “core automotive business” has no physical locations, employees, or dealerships in San Francisco. The company only sells a negligible amount of retail goods in the city, totaling approximately $677,000 in 2022. The lawsuit does not specify why GM waited until the end of 2023 to challenge the tax bill, considering that they had previously paid the assessed taxes as far back as 2016.
GM is seeking a refund of almost $108 million in taxes along with nearly $13 million in interest and penalties, claiming an overpayment for the tax years 2016 through 2022. The lawsuit argues that California’s Government Code requires a fair reflection of city taxes based on the proportion of business activities conducted within the city.
This legal dispute adds another layer to GM’s already strained relationship with San Francisco, stemming from an investigation into a October crash involving a Cruise autonomous vehicle. Following the incident, GM initiated a restructuring plan that led to a 24% reduction in Cruise’s staff and a suspension of operations in California and nationwide pending further investigations.
You can read the full lawsuit below.
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