GM Sued San Francisco for Allegedly Inflated Tax Bill
General Motors’ Cruise has had an exceptionally tough 2023, but the company isn’t going down without a fight or, in this case, a massive lawsuit against the city of San Francisco. GM has paid San Francisco $108 million in taxes and $13 million in interest since 2016 and now wants it back.
Rather than taxing GM and Cruise separately, as the automaker claims it should, the city lumped them together, resulting in higher tax bills.
The $121 million lawsuit states that San Francisco tying the two companies together drove their tax bill significantly higher than GM would on its own. While Cruise is a division of GM, the two operate relatively independently, with the automaker noting in the suit that they run “at arm’s length” from each other.
GM has burned a mind-boggling amount of money running Cruise and has recorded massive losses along the way, with almost $2 billion down the drain in the first three quarters of this year alone. The autonomous vehicle division’s cars have been involved in several high-profile incidents, one of which involved a Cruise taxi dragging a pedestrian more than 20 feet.
That led the company to voluntarily halt operations across the country, but the feds are investigating Cruise’s business and technologies, which could drum up more headaches for the division.
[Image: Michael Vi via Shutterstock]
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Chris grew up in, under, and around cars, but took the long way around to becoming an automotive writer. After a career in technology consulting and a trip through business school, Chris began writing about the automotive industry as a way to reconnect with his passion and get behind the wheel of a new car every week. He focuses on taking complex industry stories and making them digestible by any reader. Just don’t expect him to stay away from high-mileage Porsches.
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An inflated tax bill in Commiefornia? Maybe San Fran can use the money to clean the sidewalks.
I have never owned a GM product. I don’t see that changing.
These losses are a pittance compared to the money Tesla would be on the hook for if they had to refund all that money they took for the non-working FSD / Autopilot option.
California's tax collectors are incredibly aggressive and unprincipled. They bill former residents who do no more than visit. They try to nail businesses that have zero contacts in the state, arguing they have shareholders there. You think of a lousy argument for laying a tax, they'll try it. They have no scruples whatsoever.
So I cheer anyone who'll take them on.
[BTW, Chris - you don't have to say "allegedly" when referring to a civil claim against a state. You aren't libeling anyone when you report objectively about a court case.]