The Convenience of Food Delivery Could be Taxing

Food delivery services have become a go-to for busy professionals and families, providing Americans with a shortcut to home-cooked meals. Services like Blue Apron take away the hassle of shopping by delivering the ingredients to your front door with a set of instructions on how to cook each meal. For those who prefer to avoid the kitchen altogether, other services like Postmates deliver your favorite food from a local restaurant right to your home. These services can save you a trip to the grocery store, but will they save you from paying tax?

Several states in the U.S. charge sales and use tax on certain food items but not others. Food and ingredients used to make meals are exempt in these states if those items are not sold as prepared entrées. According to a recent Bloomberg post, “prepared foods include food sold in a heated state and two or more food ingredients mixed and sold as a single item, but not food that is only cut or repackaged.” For companies like Blue Apron, the food is not considered prepared and would therefore be exempt from tax. However, for delivery services like Postmates, tax will be applied to your order.

Explore Our Solutions

Discover how our technology solutions and software can help you streamline tax, stay compliant, and grow your business.

Browse All Solutions
Business using tax technology solutions