Hiccup in Sales Tax Changes for Restaurants Using Uber Eats

On July 1, 2019 Uber Eats was to begin calculating, collecting and remitting sales tax on behalf of restaurants in 14 States (including PA) and the District of Columbia, but the company has released a statement saying they were unable to separate state and local taxes for the July 1-15 reporting period and therefore, will not be submitting any taxes due.

Owners have been instructed to submit their sales taxes for July 1-15 in the usual manner. Starting with the July 16-31 reporting period, Uber will submit state sales taxes and remit any local taxes back to owners to submit.  Effective with the July returns due in August, sales tax reports should be adjusted accordingly so the taxes paid by Uber are not duplicated.

Uber Eats now falls under the “Marketplace Facilitator” laws which are state mandated and shift the sales tax collections and remittance obligations to the third-party seller. On July 1, Uber Eats began to collect and pay the sales tax on all Uber Eats orders in the following states:

• Arkansas
• District of Columbia
• Idaho
• Indiana
• Iowa
• Kentucky
• Nebraska
• New Mexico
• Pennsylvania
• Rhode Island
• South Carolina
• Virginia
• Washington
• West Virginia
• Wyoming

Marketplace Facilitator legislation is currently pending in Kansas; Missouri has a go live date of July 1, 2020.  Maryland, New York, and Vermont have also passed Marketplace Facilitator laws with future go live dates. Alabama, Connecticut, Minnesota, New Jersey, Oklahoma and South Dakota are already imposing a sales tax collection obligation on marketplace facilitators. It’s clear the list of states joining the bandwagon will grow.