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Restaurant Sales Tax Obligations: Managing Audit Risks, Multistate Compliance, and State Specific Exemptions

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, July 21, 2022

Recorded event now available

or call 1-800-926-7926

This webinar will take an in-depth look at how states tax restaurant sales. Our sales tax experts will detail the critical differences in how types of sales are taxed among states and state-specific exemptions. The panel will offer advice for accumulating, calculating, and remitting sales tax paid by food establishments operating in multiple states.

Description

More so than other businesses, restaurants have thorny sales tax issues. In addition to nexus, registration, compliance, and remittance concerns, restaurant sales taxation varies not only by the category of the charge (delivery, services fees, gratuities, etc.) but also based on the nature of the product sold (food, beverages, alcohol, etc.). Every state and jurisdiction has different rules for taxing food establishments, further complicating compliance.

Audits in California revealed that close to 20 percent of food service establishments used tax-zapper programs to reduce sales tax remittances. On the other end, many restaurants are not taking advantage of specific exemptions available to lower tax remittances. Food operations are cash intense, making these businesses prime targets for sales tax audits. Tax practitioners working with restaurants must comprehend multistate sales tax rules to ease these businesses' compliance burdens and ensure their records will withstand an audit.

Listen as our panel of hospitality industry tax experts explains sales tax considerations for restaurants, including common exemptions and steps to facilitate compliance.

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Outline

  1. Economic nexus
  2. Registration
  3. Restaurant specific issues
    1. Third-party delivery services
    2. Tax base
      1. Delivery charges
      2. Service fees
      3. Discounts
      4. Gratuities
    3. Tax types
      1. Food
      2. Beverages and alcohol
      3. Meals
      4. Prepared foods
  4. Real estate
  5. State specific exemptions
  6. Multistate compliance
  7. State enforcement

Benefits

The panel will review these and other complex matters:

  • What common state exemptions are available for restaurants?
  • How can tax practitioners help food establishments prepare for potential sales tax audits?
  • How does sales tax charged vary with the type of product sold for food operations?
  • How are restaurants affected by states' marketplace facilitator rules?

Faculty

Monsman, Jeffrey
Jeffrey Monsman, JD
Director, State & Local Tax Services
GBQ Partners

Mr. Monsman provides a variety of state and local tax services to GBQ’s clients. His practice focuses primarily...  |  Read More

Stamp, Matt
Matthew E. Stamp, JD, LLM
Director of State & Local Tax Services
GBQ Partners

Mr. Stamp has over 22 years of experience in state and local tax servicing clients in the restaurant, manufacturing,...  |  Read More

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