Taxes heading to the ballot in this November’s election would increase the cost of selling property valued at more than $5 million and close a payroll-tax loophole to provide a break for The City’s small businesses.

The payroll-tax measure, placed on the ballot Tuesday by a 10-0 vote by the Board of Supervisors, would exempt small businesses from city payroll taxes if their employees are paid $250,000 or less collectively.

The City’s existing exemption applies to businesses that have a payroll less than $167,000. Approximately 17,000 businesses do not pay San Francisco’s 1.5 percent payroll tax under The City’s existing law.

The measure would also close another loophole by requiring partners in law firms to pay The City’s payroll tax. That change is expected to generate $17 million while the exemption increase would result in a loss of $6 million.

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Board of Supervisors President Aaron Peskin has said that the measure “shifts that [tax] burden to a group of individuals who have not historically paid the payroll tax.”

Another tax measure that doubles The City’s real estate transfer tax for properties valued at more than $5 million was placed on the ballot Tuesday in a 9-2 vote, with Supervisors Carmen Chu and Michela Alioto-Pier voting against it. Peskin has said the tax “is very fair and equitable.”

A person selling a $7.5 million property, under the measure, would pay $112,500 in transfer taxes, equivalent to a 1.5 percent sales tax.

Supervisor Jake McGoldrick had proposed a more extensive real estate transfer tax measure by raising the tax rate to 1.75 percent on properties worth more than $2 million, but it did not reach the ballot.

IN OTHER ACTION 

» In a 10-1 vote, the $6.5 billion city budget for fiscal year 2008-09 was approved, and in a 9-2 vote the Muni budget was approved. 

» In a 7-3 vote, final approval was given to spending nearly $500,000 on Mayor Gavin Newsom’s proposed community justice center — a legal court with many social services — in the Tenderloin. The court would give the option for those arrested to take services in lieu of fines or jail time.

jsabatini@sfexaminer.com