In the first quarter of 2026, sales tax in the Tenderloin is off to a slow start, but officials say the data may not be fully representative of how business in the neighborhood will play out this year.\u00a0<\/p>\n
In the first three months of 2026, sales tax revenue dropped by 40 percent to $1.02 million compared to the first quarter of 2025.\u00a0<\/p>\n
Although it remains slightly higher than the first quarter of 2024, sales tax revenue is still far below its prepandemic level when the city reported $2.12 million in the first quarter of 2019.<\/p>\n
But officials with the Controller\u2019s Office say that revenue from one quarter alone may not be representative of the neighborhood\u2019s economic prospects for the year, particularly since many businesses in the area often file sales tax information late, or incorrectly.\u00a0<\/p>\n
During the pandemic, the Tenderloin experienced one of the steepest drops in the city\u2019s 37 neighborhoods. By the end of 2020, revenue had fallen to less than half a million dollars.\u00a0<\/p>\n
The pandemic hit Tenderloin businesses especially hard, said Kate Robinson, the benefit district\u2019s CEO, because many of them relied on foot traffic from workers at local government buildings.\u00a0<\/p>\n
\u201cA lot of it was attributed to the lack of city, state and federal staff members coming into the office,\u201d Robinson said. Larkin Street, the busiest Tenderloin street corridor, starts where San Francisco\u2019s City Hall and other government buildings end. \u201cBar and restaurant owners really relied on happy hour, lunch time and dinner time meet-ups right after work.\u201d<\/p>\n
Since then, in the Tenderloin\u2019s true underdog fashion, sales tax revenue in recent years has bounced back quicker than in other San Francisco neighborhoods. The jump in sales tax of 20 percent from $4.58 million in 2024 to $5.5 million 2025 was one of the biggest neighborhood increases that year.<\/p>\n
And, Robinson said that even if it isn\u2019t showing up yet in the sales tax data, targeted efforts to bring more small businesses into the neighborhood\u2019s vacant storefronts appear to be paying off. Those efforts started in 2023.\u00a0<\/p>\n
Most recently, the Larkin Street Revival project aimed at neighborhood beautification and safety efforts, also launched with a $5 million donation from cryptocurrency billionaire Chris Larsen. It\u00a0 is run by the Tenderloin Community Benefit District, ands so far it has installed\u00a0 decorative security gates<\/a> for storefronts on Larkin Street and added lighting across the corridor. It also subsidized Live on Larkin, a series of block parties, with live music and other activities, that started in May.\u00a0<\/p>\n