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Florida: Sales Tax on Restaurant Delivery Charges


 Speedy food delivery.

Papa John’s Pizza is facing a class action lawsuit in Florida for allegedly incorrectly collecting sales tax on delivery charges (the case is making its way through the Florida court). While many folks are simply overjoyed to have hot pizza in hand, others scan receipts to be sure they’re not paying one penny too much in tax. That’s one reason businesses should get sales tax right.

With that in mind, a Florida business that sells delivery service franchises asked the Florida Department of Revenue for clarification on the following matters:

  • Should it charge sales tax on delivery fees for restaurants that do not allow pick-up as an option?
  • Should it charge sales tax on delivery fees for restaurants that do allow pick as an option?
  • Should it charge sales tax on separately itemized processing fees?
  • In the event delivery and/or processing fees are subject to sales tax, should it remit the tax it collects to the Department of Revenue or forward it to the restaurants for them to remit?

Customers order food from participating restaurants on the franchisee’s web portal, and the order is then electronically communicated to the chosen restaurants. The franchisee collects the money, keeps applicable processing and delivery fees, and withholds a commission (a percentage of the value of the sales price of the food purchased). Once per week, the franchisee remits to each restaurant money collected for the sale of food, less the commission and sales tax collected. The commission is kept and the sales tax is remitted to the Department of Revenue. As for the delivery fee, it is remitted to the third-party delivery company.

Answers

Does sales tax apply to delivery fees for restaurants that do not allow pick-up as an option?

Delivery charges cannot be avoided and therefore they are part of the sales price of the meal and are subject to sales tax.

Does sales tax apply to delivery fees for restaurants that do allow pick as an option?

Optional delivery charges are separately stated and therefore are not part of the taxable meal and are not subject to sales tax.

Does sales tax apply to separately itemized processing fees?

Processing fees are part of the sales price in all instances and are therefore subject to sales tax.

In the event delivery and/or processing fees are subject to sales tax, should it remit the tax it collects to the Department of Revenue or forward it to the restaurants for them to remit?

Sales tax should be remitted to the Department of Revenue.

Additional information is available on the Florida Department of Revenue Technical Assistance Advisement.

photo credit: appropos via photopin cc


Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.