topic Re: Who is Submitting & Paying State Sales Tax on the New Online Order Processing Fee? in Guest Experience

Who is Submitting & Paying State Sales Tax on the New Online Order Processing Fee?

briantsiv — Fri, 16 Jun 2023 21:58:58 GMT

Hi,

I have received my first online order charging the customer the $.99 Online Order Processing Fee. The State of Utah requires Sales tax to be paid for any fee that is not "optional" for the customer. Is Toast submitting and paying the sales tax on this fee to the State of Utah? What are the Laws for other States? As a business this is required. For example DoorDash, Uber, GrubHub, etc collect the Utah Sales Tax and send it to my account and I report this sale and therefore submit the required Sales Tax to the State of Utah. This seems to be a very large liability to Toast POS users.

-Briant

Re: Who is Submitting & Paying State Sales Tax on the New Online Order Processing Fee?

Rob — Fri, 23 Jun 2023 03:16:42 GMT

Hey @briantsiv Thanks for your question. Toast does not default sales tax on the Order Processing Fee. You have the ability within your configuration setting to configure sales tax how you choose. Toast does not provide legal, tax, or other professional advice. You are responsible for your own compliance with applicable laws and regulations. We suggest contacting your attorney or other relevant professional advisors for advice specific to your circumstances.

Re: Who is Submitting & Paying State Sales Tax on the New Online Order Processing Fee?

ZK — Sat, 24 Jun 2023 20:06:52 GMT

I am also curious about this for New Jersey sales tax. As the restaurant never sees this money, I would think Toast would be responsible for collecting any applicable sales taxes & remitting that to the state. This is Toast's income, not the restaurants. I've submitted a request for guidance on this to the New Jersey Division of Taxation & will post the results if/when I hear back from them.

Re: Who is Submitting & Paying State Sales Tax on the New Online Order Processing Fee?

Kmainoturner — Sun, 02 Jul 2023 13:28:45 GMT

Toast informed the Mass Rest Asso that the operators are responsible for collecting and submitting the meals tax. Toast also informed the MRA that Toast would not be covering the credit card fees associated with collecting this additional meals tax that their fee creates. Toast has said that credit card fees will not be charged on the .99 cents that they take directly daily from our cc batches, but after a week of our guests being charged, our credit card fees remain unchanged and it is impossible to reconcile the accounting on this fee to toast and its accompanying cc fees. Also reconciling our bank accounts monthly will now be impossible because the batches will not match what comes over from the Toast to R365. Toast also clearly stated there will be no compensation to operators for cost of the additional the administrative time this new fee adds to operators. We also are moving to a different online sales platform ASAP.

Re: Who is Submitting & Paying State Sales Tax on the New Online Order Processing Fee?

briantsiv — Sun, 02 Jul 2023 14:33:26 GMT

To follow up. I spoke with the Utah State Tax Commission on Friday and they confirmed that Toast is required to report, collect and submit sales tax on this fee as it is a mandatory fee that is not being charge by the restaurant nor is the restaurant responsible for this reporting. Additionally they requested that I submit this to their fraud department so that the the Utah State Tax Commission Auditors can begin an investigation into Toast's sales tax collection violation. Finally they also asked me to follow up with the Utah Commerce Department as they saw this as another potential avenue for investigation.

Much like many of you I came to Toast from Aloha after hearing so many great things from my R365 users group. I am no longer in contract with Toast and will begin researching other R365 compatible POS platforms. They way that Toast has decided to implement this fee shows me that they no longer want to support local, independent restaurants.

Re: Who is Submitting & Paying State Sales Tax on the New Online Order Processing Fee?

au79teahouse — Sun, 02 Jul 2023 19:34:28 GMT

Hi @briantsiv, how is Toast responsible for collecting and submitting the sales tax on the $0.99 fee since $0.99 is not taxed? Or it a service fee that should be taxed in Utah?
@Kmainoturnergot a very good point. I have never thought about.

Re: Who is Submitting & Paying State Sales Tax on the New Online Order Processing Fee?

briantsiv — Mon, 03 Jul 2023 13:03:40 GMT

Because the $.99 is revenue for Toast and not the restaurant they are required to collect, report and submit sales tax to the State. All mandatory Service Fee's are taxable in Utah.

Re: Who is Submitting & Paying State Sales Tax on the New Online Order Processing Fee?

corey_akc — Mon, 03 Jul 2023 21:32:19 GMT

I am also located in NJ and looking forward to what you find out. Looks like lots of other people in this thread have heard back that Toast is responsible.

Re: Who is Submitting & Paying State Sales Tax on the New Online Order Processing Fee?

ZK — Mon, 03 Jul 2023 21:55:50 GMT

I haven't heard back yet, but I would encourage you to submit an inquiry to the NJ Division of Taxation at https://www.state.nj.us/treasury/taxation/contact.shtml. I am not an accountant, nor lawyer, so you should not base your decision on how to handle this fee upon what I hear from the the state. I will post their reply once it's received.

Re: Who is Submitting & Paying State Sales Tax on the New Online Order Processing Fee?

SunnyinAZ — Wed, 12 Jul 2023 04:36:50 GMT

Join our zoom call on Thursday to discuss alternatives given Toast's .99 money grab from OUR customers. Email for a link RestaurantsWorkingTogether@gmail.com

Re: Who is Submitting & Paying State Sales Tax on the New Online Order Processing Fee?

SunnyinAZ — Wed, 12 Jul 2023 04:41:24 GMT

@Kmainoturner @briantsiv @corey_akc We have a zoom call on Thursday to discuss alternatives given Toast's .99 money grab. Join us. Email RestaurantsWorkingTogether@gmail.com to get the Zoom link.