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Sales Taxes for Food Takeout and Third-Party Delivery Services: Key Issues for Registration, Reporting, Compliance

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, January 12, 2023

Recorded event now available

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This course will guide tax professionals on sales tax issues for food takeout and third-party delivery services. The panel will discuss sales tax collection laws and their application to restaurants that use third-party delivery service providers such as GrubHub, Uber Eats, and DoorDash. The panel will also discuss critical issues in collecting and remitting sales tax as a marketplace facilitator, the taxability of what the restaurant sells, and methods to maintain compliance.

Description

During the pandemic, many restaurants and bars switched to a business model focused on using third-party service providers for food takeout and delivery. Food delivery services such as DoorDash, GrubHub, Postmates, and Uber Eats face increasing scrutiny on their sales tax compliance practices, which also causes significant compliance issues for the restaurants and bars that use them.

State tax rules post-Wayfair continue to create issues and unanticipated consequences for online sellers. The changes in sales tax compliance standards in these states significantly impact restaurants and bars that use third-party food takeout and delivery service apps. These businesses are now often considered marketplace facilitators and responsible for sales tax collection and remittance rather than restaurants and bars.

Tax professionals must be aware of the differences in state sales tax treatment of food takeout and delivery. In some states, restaurant meals are subject to sales tax, whether served on the premises, to go, or delivered. In other states, sales tax for food takeout or delivery differs from the rules for dining on the premises. Some states have set parameters for the taxability of food takeout or delivery based on various conditions.

Listen as our panel discusses sales tax collection laws and their application to restaurants that use third-party delivery service providers, state taxability standards, exemptions, and best practices in collecting and remitting sales tax as a marketplace facilitator.

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Outline

  1. Sales tax concepts applicable to food delivery and takeout
  2. Problematic scenarios and issues to anticipate
  3. Compliance; collection, remittance, and documentation
  4. Ongoing compliance demands
  5. States that pose particular issues

Benefits

The panel will discuss these and other key issues:

  • Is a food delivery service a marketplace facilitator?
  • How can you determine if the sale of delivered food is subject to sales tax?
  • What are the larger states' food takeout or delivery and sales tax rules?
  • What other considerations exist for sales through a delivery service?

Faculty

Cook, Jeffrey
Jeffrey M. Cook
Senior Manager
KPMG

Mr. Cook provides thought leadership for the SALT practice by authoring internal and external publications; tracking...  |  Read More

Tannenbaum, Ryanne
Ryanne Tannenbaum
Senior Manager
KPMG

Ms. Tannenbaum has over 7 years of experience advising multinational clients on indirect tax matters with a primary...  |  Read More

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