Are you overpaying sales tax on delivery orders?

Reporting sales tax is becoming ever more complex, particularly as delivery is becoming a key component in running a restaurant. States and delivery companies handle the reporting of sales tax differently so keeping detailed records is important so restaurant owners don’t underpay – or overpay – sales tax.

If Antares Group provides sales tax filing services for you either as part of our Back Office Solutions or as a standalone service, please be sure we have your login information for all your delivery providers at all your restaurants. Even if one location does not have high delivery volume, every little bit can add up over time and we want to make sure your sales tax reporting is accurate.

If you are handling the reporting and remittance of sales tax on your own, please be sure you are handling the marketplace facilitator reporting correctly. Staying on top of this is important because states have different requirements and the various delivery companies are continually updating their policies and procedures.

It is easy to become confused about who is responsible for collecting sales and use taxes on food and beverage taxes on sales going through the delivery platforms. Keeping track of which company is remitting sales tax and if anyone has changed how they are handling this is almost a full-time job.

Because states have different laws, the same delivery company may be required to collect and remit sales tax in one state but not in another. Furthermore, not all delivery platforms are treated the same in each state.  For instance, restaurants working with DoorDash in one state may be required to remit sales tax directly to the state, whereas UberEats in that same state will collect and remit sales tax on food orders instead of the restaurants.

Even the food and beverage sold and delivered may have different rules. If one delivery company is responsible for collecting sales and use tax on food, it may not be required to collect on beer and wine tax or other excise or special food and beverage/meals taxes.

Issues can arise if both the business owner and the delivery company remit sales tax, resulting in a double payment. Likewise, sales tax remittance can fall through the cracks if a business owner mistakenly thinks a delivery company is remitting the tax.

In the event discrepancies are detected, filing an amended sales tax return is an option. Note, however, that doing so can trigger a sales tax audit.

As you can see, there are many moving parts in sales and use tax reporting which is why it is so important that our team has all the information we need for your delivery providers at all your restaurants if we are handing this task for you.

If you are interested in learning how Antares Group can assist you in reporting your sales and use taxes, please contact Robin Tignor, CPA, or Bridgett Sims at 770-785-7855.

Whether we handle this service for your business or you take care of it on your own, our Sales Tax team is available to help answer any questions you may have.

Robin Tignor, CPA, is a Specialty Tax Manager with Antares Group, Inc. She can be reached at rjt@antarescpas.com.

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