Toast MPF

[BotanicalFare]

We are trying to figure Toast MPF. It has a different model than either Doordash or Uber and we can't figure out where the sales numbers are derived for what they consider the MPF sales number that they collect and remit taxes on. The 75,919.81 is the net sales number. I cant figure out how and where the $404.2 comes from, I can back into the other sales numbers but not the Toast MPF sales number.

Tax	Order Count	Tax Amount	Net Sales	$75,919.81
Meals Tax		4171.46	69469.47
VA CITY TAX		707.48	71118.53
VA STATE TAX		3060.56	71119.76
Non Taxable	35		91.15
Marketplace Facilitator Taxes Paid		78.07	1528.86
Toast Marketplace Facilitator Taxes Paid		44.64	402.02	11.1%
Marketplace Facilitator Taxes Not Paid		408.7	4292.88

[au79teahouse]

When you said "I cant figure out how and where the $404.2 comes from", could you be a little bit more specific on that please?

[BotanicalFare]

Using our normal balance audit model we have the following which generally gets us to Zero balance except when there are we assume rounding errors.  We take the net sales and subtract all the elements that have no tax paid and we must pay them so its credited to taxes payable. The example below follows the data above resulting in a remainder of $416.02. According to the table the only thing close is the Toast MPF value $402.02 and Toast is paying that tax so it would not be credited to taxes payable. We cannot balance the Toast Net Sales value of $75,919.81. We could always use this process to confirm the entries but ever since the Toast MPF it does not balance. So we don't understand where the $402.20 comes from. Also we don't do delivery with Toast so is the Toast MPF value from orders that are place via Toast Web for pick up?

State
$            75,919.81	Net Sales
$           (71,119.76)	Toast NS tax not paid
$              4,800.05
$            (4,292.88)	MF tax not paid
$                 507.17
$                            0	Non Grat $0 Tax
$                 507.17
$                 (91.15)	Not taxable transactions.
416.02

[au79teahouse]

Thank you for the detailed explanation. Toast MPF is generated from Toast Takeout App and Toast Local based on this article here: https://central.toasttab.com/s/article/Understanding-Marketplace-Facilitator-Laws-How-They-Affect-Yo...

Let me look into your numbers and I will circle back to you.

[au79teahouse]

I personally wouldn't use balance audit model with the numbers in the tax section from sales summary report because those numbers may not reflect the actual net sales from each dining option (ex: dine-in, takeout, online, 3PD). The net sales numbers in the tax section only indicate how much in sales is applicable to each specific tax rate.

I assume the tax amount for Toast Takeout App and Toast Local orders is already included in:

Meals Tax		4171.46	69469.47
VA CITY TAX		707.48	71118.53
VA STATE TAX		3060.56	71119.76

This line tells you the tax amount Toast remits for you:

Toast Marketplace Facilitator Taxes Paid

44.64

402.02

11.1%

It's little bit difficult for me validate my theory since I don't have Toast MPF with our business. But we can try to narrow down the problem if you could double check on the followings

Under Sales Summary Report,
1) check if the sum of the net sale of each dining option = the total net sales
2) check if the total tax amount = total of each tax amount listed under Tax Section (which is 8470.91 in the case of your example).

If 1) and 2) are TRUE, then based on your numbers, the tax amount that your business should remit would be (this is assuming Toast MPF tax is counted twice):
The sum of (Meals Tax, VA CITY TAX, VA STATE TAX)
- Toast Marketplace Facilitator Taxes Paid
+ Marketplace Facilitator Taxes Not Paid
= 7939.5 - 44.64 + 408.70
= 8303.56

Total tax amount - Marketplace Facilitator Taxes Paid - Toast Marketplace Facilitator Taxes Paid*2
= 8470.91 - 78.07 - 44.64*2
= 8303.56

If 2) is FALSE, then check if:
Total tax amount - total of each tax amount = +-44.64,

If TRUE, then it means the total tax amount only counts Toast MPF once. Your remittable tax amount can be calculated by:
Total tax amount - Marketplace Facilitator Taxes Paid - Toast Marketplace Facilitator Taxes Paid

** Noted that:
1) I'm not an accounting/tax expert and I don't work for Toast. Everything I have above is solely my speculation based on data I can access and our tax configuration.
2) Throughout the investigation, I did find GrubHub tax amount is not displayed correctly as in it is not included in neither "Marketplace Facilitator Taxes Paid" or "Marketplace Facilitator Taxes Not Paid". I have never thought about it because we always use 3PD's report to get their tax amount. Toast does not reflect changes to 3PD orders after orders are pushed to pos. (such as adjustment, order cancelled, etc).