Sales tax for restaurants
Restaurant sales tax, worked out line by line and state by state
Mosey works out the sales tax on a sale from your address and the kind of item sold, and shows it as its own line on the bill. Where a city adds a tax of its own, that is a separate line too, so you can see what you are collecting and for whom.
Free to list: your menu, replies and photos.
Why restaurant sales tax goes wrong
A burger, a soda and a beer can be three different tax treatments on one table. The rate depends on the state, often the county and sometimes the city, and some states and cities tax prepared food while leaving groceries alone. Most owners end up with one number in the till and a hope that it is right.
The mistakes are quiet. Tax charged too low is a bill you meet at the end of the year, with interest. Tax charged too high is a guest who notices on the receipt. Neither shows up until someone looks.
How Mosey works out the tax on a sale
Every item on your menu has a type: a meal, a soft drink, an alcoholic drink, a gift card, a ticket. Each type maps to a tax code, and there is one list of those codes that the whole system reads. An item with a type Mosey does not know is refused, never guessed.
The rate for each code comes from Stripe Tax, for the address of your business. Mosey prices each line on its own and rounds line by line, so the lines on the bill add up to the total the guest pays. Tips are never taxed and never part of the amount tax is worked out on.
To keep a busy service fast, Mosey keeps one calculation for each of your tax codes and refreshes it at the start of every quarter and whenever your address changes. Once a month it checks the saved rates again and flags any difference to the Mosey team. It never overwrites a rate quietly.
A bill that has been priced keeps its tax. If a rate changes halfway through service, the bill in front of the guest does not move.
City and county taxes show up as their own lines
Some local taxes sit on top of the state rate. Mosey carries them as separate, named lines instead of folding them into one rate, and only for the businesses they apply to. A local tax is only ever charged after Mosey has checked it and marked it confirmed; an unconfirmed tax charges nothing.
These are the ones Mosey has set up so far:
- Chicago: the 0.5% restaurant tax on food and drink.
- Minneapolis: the 3% downtown restaurant tax on food and soft drinks, and the 3% downtown liquor tax on alcohol instead of it, never both on the same item.
- Minnesota: the 2.5% liquor tax, for a business that holds an intoxicating liquor license.
- Philadelphia: the 10% liquor tax on alcohol sold by a licensee. Pennsylvania charges no state sales tax on that alcohol.
- Massachusetts: the 0.75% local meals tax, for Boston and Cambridge only so far.
- Charlotte area: the 1% prepared food and beverage tax in Mecklenburg County.
What your bill and your records show
The bill shows the goods, then each tax by name and rate, then the total. Every line of tax is kept as its own record, and the records are kept for six years. A sale stays in the period it was made; a refund goes in the period it was given.
Mosey builds your sales tax return figures from those saved lines, adding them up rather than applying a rate to a total, and splits what you file from anything Mosey itself owes. You can download the figures as a file for your accountant.
Registering with your state, filing and paying your own returns stay with you and your accountant. Mosey shows a due date only where it has a confirmed rule for your state, and otherwise says to check with your accountant. Where it has one, a reminder arrives 14 days and 3 days before.
What Mosey does not claim
Sales tax is the law of fifty states and thousands of cities, and some of it changes in the middle of a year. Mosey sets out the rule it follows for each local tax and leaves the rest to Stripe Tax. It is not tax advice, and it does not replace your accountant. If a rule matters to you, ask your accountant to confirm it for your address.
Where the rules differ
A few states need something more than an address. This is what Mosey does in each.
- Pennsylvania
- Alcohol sold by a licensee is moved off the state sales tax before the tax is worked out. A meal deal that includes alcohol is split into its food part and its alcohol part by the menu prices of the items, so each part is taxed as what it is.
- Florida
- Local taxes that apply to some Florida cities and counties are set for each business by the Mosey team, and a business without one set charges none.
- Illinois, Minnesota and Massachusetts
- Each has local or liquor taxes of its own, listed above, and each is applied only to the businesses it covers.
Rules change. Check any rule that matters to you with your accountant or adviser.
What Mosey is about
Affordable tools for food businesses
Tools priced for independents and small chains, not for the big groups.
A full suite, in one login
The tools a restaurant, café or bar needs sit together, so you are not paying for a stack of separate subscriptions.
You keep more of your revenue
Mosey is built so that more of every sale stays with the business that made it.
Free to list and claim
Your menu, your replies to guests and your photos cost nothing to put on Mosey.
No hidden fees
What Mosey charges is published, in full, so nothing arrives as a surprise on a statement.
Made for local food businesses
Mosey helps diners find independent food businesses by dish and mood, and lets people rate what they actually ate.
Questions owners ask
Does Mosey work out sales tax for my restaurant?
Yes. Mosey prices the tax on each line of a sale from the type of item and your address, and shows it as its own line on the bill.
Where do the rates come from?
From Stripe Tax, for your business address. Mosey adds the local taxes it has set up itself, and charges one only after it has been confirmed.
What happens when my address or a rate changes?
Mosey refreshes your saved rates at the start of each quarter and whenever your address changes. A bill that was already priced keeps the tax it was priced with.
Is a tip taxed?
No. A tip is never part of the amount tax is worked out on.
Can I get the figures for my return?
Yes. Mosey adds up the saved tax lines for the period and gives you a file for your accountant. Filing and paying the return is still yours.
Does Mosey tell me when a return is due?
Where Mosey has a confirmed due date rule for your state, it sends a reminder 14 days and 3 days before. Where it does not, it tells you to check with your accountant instead of guessing a date.
Is a city tax like Chicago restaurant tax handled?
Chicago, Minneapolis, Philadelphia, Boston and Cambridge, Charlotte area and a few more are set up as their own lines. A local tax that has not been confirmed is never charged.
Is this tax advice?
No. Ask your accountant to confirm the treatment for your address and your menu.
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