San Francisco is offering businesses a tax credit for letting the city keep taxes that a court may rule violate the California Constitution.

A Board of Supervisors committee April 3 approved an ordinance creating incentives for businesses to donate their homelessness tax. Businesses facing a bill under the city’s homelessness gross receipts tax will now get a 10 percent tax credit if they donate the payment to a city fund and forego a potential refund. The total amount of the...