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Washington: Want That With a Side of Sales Tax?


 Employee meals? Know the tax consequences.

Restaurants often comp their employees a free meal per shift. It’s a good way for the staff to get to know the menu and it’s a nice perk in an industry where wages tend to be low. But for restaurant owners in Washington State, free meals come with a side of tax complications.

The Washington State Department of Revenue has recently issued a special notice regarding the complimentary meals restaurants provide to employees. It reveals that legislation taking effect on July 24, 2015, “clarifies that the exemption from sales, use and business & occupation (B&O) taxes only applies to meals provided to restaurant employees for free.”

Under Section 302ff of Substitute Senate Bill 5275, “meals provided by a restaurant without specific charge to its employees” are exempt from sales and use tax and the B&O tax. Language has been changed to reflect the fact that free meals provided to someone else’s employees could be subject to tax.

When it comes to sales tax, as with so much in life, a simple word can make a big difference.

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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.