D.C. Provides Guidance on Restaurant Sales Made Through a Marketplace Facilitator

The District of Columbia Office of Tax and Revenue (OTR) has issued a notice regarding the sales tax treatment of restaurant sales of food, drink and alcohol made through a marketplace facilitator. If a marketplace facilitator takes orders and accepts payment for delivery or pick-up at a restaurant of food, drink, or alcohol, the marketplace facilitator is required to collect sales tax from customers at the proper rate and remit the sales tax to the OTR. Marketplace facilitators are required to collect and remit D.C. sales tax on restaurant sales at the rate of 10% (10.25% for alcoholic beverages to be consumed off-premises). Marketplace facilitators should not pay sales tax to the restaurant. If a restaurant erroneously receives sales tax from a marketplace facilitator, it should report and remit the funds to the OTR on its sales tax return. Note that restaurants that make sales directly to customers (not through a marketplace facilitator) are required to collect and remit sales tax to the OTR at the rates described above. For our previous news item on D.C.’s marketplace nexus legislation, see D.C. Passes Economic and Marketplace Nexus Legislation. (Notice 2020-06, D.C. Office of Tax and Revenue, May 26, 2020)

Posted on June 18, 2020