If you’re a restaurant working with 3rd-party delivery services, it’s incredibly important to know your state’s rules for sales tax remittance – as you don’t want to be overpaying.
We’ve put together a quick (2 minute) video to help explain why it’s vital that you stay informed. You can also read the transcript below.
With the rapid increase in 3rd-party delivery services over the past few years, many franchise owners have struggled to keep up with the constantly changing systems and procedures. In this short video, I’ll talk about one of the most important aspects of working with third-party delivery services, which is sales tax remittance.
Every state has different rules for who should remit sales tax on orders placed using third-party delivery services. In some cases it’s the restaurant, and in some cases it’s the delivery service. Keeping track of this information can save you thousands of dollars each year.
From an accounting standpoint, point of sale systems can’t distinguish between an order placed in-store and an order placed through a third-party service. So, the sales tax for all orders is automatically included in your sales reports. When you file, you’ll pay out the sales tax on your gross sales.
If, however, it’s the third-party’s responsibility to remit sales tax in that state, you’ll end up double paying in your filings. This can add up to tens of thousands of dollars in operpayment.
We recently had a client realize they’d been overpaying for the last two years. They reached out and asked OnePoint to amend their filings. After sorting through two years of data across four different delivery services, we discovered they had overpaid by $30 thousand dollars. That’s a lot of money to waste on a relatively simple issue.
In upcoming videos, we’ll discuss how to ensure you’re not overpaying by programming your point of sale systems and reconciling statements from third-party services. The most important take-away is to find out if your business is responsible for remitting sales tax in your state.
Keep in mind that these laws are changing as the industry changes. It’s important that you keep up with any communications from your accounting partner and the delivery services. Ignoring those emails can be a costly mistake.
If you’d like help ensuring you aren’t overpaying, we’d love to talk. Reach out today to speak with one of our experienced account managers about OnePoints accounting services.