Feb 11, 2020

Third Party Providers Responsible for Collecting and Remitting Sales Tax

taxes_566835985A state law was passed (2019 Wis. Act 10) which provides new standards for administering sales tax laws.

The law clarifies that a marketplace provider is required to collect and remit sales or use tax for all sales of taxable products and services in Wisconsin that the marketplace provider facilitates on behalf of a marketplace seller.

This means a third party provider such as a company that delivers food from restaurants like Grubhub, Uber Eats, etc. is required to collect sales tax from the customer at the time of purchase and remit the sales tax to the State of Wisconsin.

Keep in mind, a third party provider can apply for a waiver from the Wisconsin Department of Revenue (DOR). In that case, they would be responsible for collecting the sales tax, sending the tax amount related to the food purchase to the restaurant and the restaurant would be then be responsible for remitting the tax.

Most third party providers acted in this manner prior to the law going into effect. If the third party company has qualified for a waiver, it is their responsibility to notify the restaurants that they work with.

No company has received a waiver from the DOR at this time. This means that all third party delivery companies that are collecting money on the restaurant’s behalf must also collect and remit the sales tax to the DOR.

This law took effect January 1st.
Questions? Contact Susan Quam at 608-270-9950 or squam@wirestaurant.org