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Restaurateurs: Check Delivery Reports for State Sales Tax Collections

Posted by Steve Bickert and Patty Wiesmeth on Thu, Jun 18, 2020

Restaurateurs: Check Your Delivery Reports for State Sales Tax CollectionsRestaurateurs should pay close attention to their monthly reports from third-party delivery services to see if the delivery services are remitting state sales tax on the delivery orders on their behalf.

Uber Eats started remitting state sales taxes last year and now remits state sales tax in 32 states. You can view the entire list here to see if your state is included.

DoorDash recently started remitting state sales tax in Pennsylvania and Washington state, and Grubhub has started in a few states, as well.

DoorDash has a page on its website restaurateurs can check to see if their state is included. Grubhub doesn’t appear to have the information on its website.

READ MORE: Buying a New Restaurant? Borrow Techniques from a Turnaround CFO

The best way to know if a third-party delivery service is remitting state sales tax is to check the monthly statement for a “marketplace facilitator tax.” This is the easiest way to know if they are remitting sales tax – especially if you start working with another third-party delivery service or if your state gets added to a particular service’s collection list.

If the delivery service has remitted state sales tax as a marketplace facilitator, you do not have to remit the state sales tax for those sales. It’s important to check your delivery service statements each month so you’re not overpaying sales tax.

Please note that only state sales tax will be remitted by the delivery services. They will not remit any local or county tax.

If you have mistakenly remitted sales tax on delivery sales that were also remitted by the delivery service, you can amend your tax returns to get the duplicative tax back. Please contact us with any questions you have.

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Topics: McDonald's management, Restaurants

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This communication is designed to provide accurate and authoritative information in regard to the subject matter covered at the time it was published. However, the general information herein is not intended to be nor should it be treated as tax, legal, or accounting advice. Additional issues could exist that would affect the tax treatment of a specific transaction and, therefore, taxpayers should seek advice from an independent tax advisor based on their particular circumstances before acting on any information presented. This information is not intended to be nor can it be used by any taxpayer for the purposes of avoiding tax penalties.

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