GM sues San Francisco over $121 million tax bill linked to Cruise

General Motors has sued San Francisco to claw back some $121 million in taxes, penalties and interest the automaker claims it was overcharged by the city. 

In the complaint filed last week, GM is seeking a refund of $108 million in taxes and another $13 million in interest and penalties covering the 2016 through 2022 tax years, saying it was unfairly charged the funds because San Francisco included part of GM’s gross receipts when calculating fees linked to its Cruise robotaxi division that is based in the city.

The Detroit automaker argues 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.

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“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.

San Francisco previously denied GM’s request for a refund covering the years at issue. A spokesperson for San Francisco City Attorney David Chiu told FOX Business in a statement, “We are reviewing the complaint and will respond in court.”

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GM’s lawsuit comes as San Francisco faces a projected $800 million budget deficit over the coming two fiscal years, and Mayor London Breed has asked city agencies to cut their budgets by 10% to close the gap.

Cruise, meanwhile, is having struggles of its own. GM shut down Cruise’s robotaxi operations for a safety probe after a woman was struck and dragged by a Cruise vehicle in San Francisco on Oct. 2.

Earlier this month, Cruise announced it was slashing 24% of its workforce and fired nine executives. The company has faced intense scrutiny from California regulators since the accident.

FOX Business’ Chris Pandolfo and Reuters contributed to this report.