McDonald’s ‘Eat In’ Tax?
7.27.2006 – 9:25 am | by paul
Last night I had dinner at my local McDonald’s, at 6th and Bryant. While I was eating I happened to glance down at my receipt, and noticed that they have an “Eat In” tax. WTF! I have to pay $.55 extra for sitting in their crappy plastic chairs? Next time I’ll order it to go, and then eat it there… that will show those capitalist bastards.
Is this a San Francisco thing, or do they do this everywhere?
UPDATE (8.01.06): I went to the same McDonald’s yesterday and ordered my food to go… sure enough, there was a “Take Out Tax”, using the same percentage. Why they just don’t call it “Tax” is beyond me, but I guess the mystery is solved.
July 27th, 2006 at 9:58 am
As far as I know it’s everywhere (I live in Evansville, IN), and I agree, it’s ridiculous.
July 27th, 2006 at 10:26 am
»…Next time I’ll order it to go…«
Next time you should go to Burger King (if they dont do the same). If a company says (and with their “eat in tax” the do!) : we want you to buy our products, but we dont want to have you here sitting around because it incereases our profit - they have to make their money without me!
ninjaturkey from germany
July 27th, 2006 at 10:48 am
In my experience, most fast food places charge this tax - although it isn’t always so truthfully described on the receipt. I do exactly what you said - I order to go and then eat in anyway.
Although if I were to really make a recommendation, it would be to not eat at McDonald’s. They’re….ew
July 27th, 2006 at 11:04 am
Yep, they do this in MN too… out here there’s no sales tax on food (grocery items, etc.) if it’s not considered a luxury item (i.e. a bag of chips). I think somehow McDonalds gets around sales tax if you order to go, but not if you eat in. It seems like where it says ‘EAT IN TAX’ on the receipt it would say ‘6.5% SALES TAX’ at any other restaurant.
July 27th, 2006 at 12:08 pm
My mom is a tax auditor and I read a report on an audit that if it’s hot and you eat in they can charge you tax because the cooked the meal, but the state gets the EAT IN TAX because of the hospitality. I’m from Fresno, CA
July 27th, 2006 at 12:15 pm
As far as I remember from my days at Burger King during high school — state sales tax is charged for any prepared food item. It differs from grocery stores, however, where many grocery products are not taxed at all, because they’re not ‘prepared’.
I recall being taught that at BK because some local news station ran a “we care about you” expose and totally got the facts wrong about food taxation, confusing prepared with grocery and so every 3rd customer wanted to complain about 37 cents in taxes.
This is California though, I don’t know if the laws are different in other states.
July 27th, 2006 at 3:37 pm
Charging more for sit in rather than takeout is pretty normal in the UK and always has been I guess. Starbucks picked it up straight away and displays double pricing on most of their products. That seems silly to me because we often pick up a coffee and want to leave with it after sitting for a brief moment. (BTW, Starbucks in the UK has the worst service and quality of anywhere I’ve ever been, but that’s another story.)
But this is nothing to do with a ‘tax’ as far as I know. There’s been a lot in the news recently of companies adding ‘taxes’ to bills, but either hiding them or adding their own percentage to the total. In some places — Japan for example — paying 55c for a seat is probably a bargain!
July 27th, 2006 at 3:43 pm
Like an above poster said “stop eating McDonald’s eww”
If I’m going to be “taxed” for sitting, the eating area better be spotless and looking great. Unlike some fast food resturants (Wendys’ here in Houston, Tx) who attract flies and have ketchup on the tables. If we are to be taxed than clean the place up.
July 28th, 2006 at 12:14 am
is it possible that the tax is just the normal sales tax, but their computer differentiates for later analysis? Do we know if there is a different tax for carry-out, or drive-thru?
July 28th, 2006 at 11:16 am
As a POS / IT Technician, I am amazed at some things that consumers are aware of or not.
This is going to sound a little condescending, sorry, but think of it as a smack on the ass kind of thing…
Did you really think that a major US corporation can charge their own taxes?
You think a business can arbitrarily tax whatever they want with out informing you? Is there anything on the Menu that would even IMPLY that they will be charging you any additional fees?
DID YOU NOT NOTICE THAT $0.55 IS EXACTLY 8.5% OF YOUR BILL????
ITS A FREEKING NORMAL SALES TAX!!!!!
Ok, now with that out of the way, McDonalds has an obligation to explain CLEARLY every line item on your check, and this is where they failed miserably. The words “EAT IN” are simply stating the mode that the order was placed. So, if you ordered your same exact meal to go, you would get a receipt that says “TAKE OUT TAX”, and the charge would be the same, 8.5%. It is, in fact, a way to differentiate the tax, exactly as Jason guessed.
In the US, taxes are determined by state, county and/or local governments, so there are many different scenarios that POS systems have to accomodate. McDonald’s choice for handling these different taxation methods is to create a “tax category” with a description of “EAT IN TAX”. A poor choice, indeed, but most likely it will not be the last poor choice that McDonald’s makes.
I do work around the US, so I can also tell you that in 95% of the country, sales tax is applied to food at a restaurant. It is almost always the exact same rate whether you dine-in or take-away. There are only a few exeptions.
July 28th, 2006 at 2:58 pm
It’s a sales tax charged on food you eat in the establishment. There are places in California that do NOT charge sales tax if you get it to go. When I go to the Coffee Bean on Hillhurst in LA, they always ask if it’s to go. If I say it’s for there, they charge a sales tax on the food (coffee, muffin, whatever) and I say it’s to go, they do not. I asked about this once, and they just told me about the tax - it’s charged on eat-in orders, but not on to-go items. That’s why it’s listed as an eat-in tax and not a sales tax, although it is a tax that gets paid to the state. California’s the only state I’ve noticed this in. It’s wacky, and counter-intuitive, but that’s California for you.
-Scruffy
July 28th, 2006 at 3:09 pm
This post would have been the last post I would expect to get comments. That just goes to show you that you never know will will get people up and typing.
There are a few different theories here , so the next time I’m at McDonald’s, I’ll get my order to go. We’ll see what the receipt says.
July 28th, 2006 at 5:53 pm
You are worried about a 55-cent eat in tax? Dude… you just paid over TWO DOLLARS for a cup of Mr. Pibb. I’d say renting the plastic chairs was a bargin. :)
July 29th, 2006 at 9:17 am
I was told once that the philosophy behind this STATE tax is: 1) tax whatever you can to generate needed revenue, 2) don’t tax food purchased at grocery stores as this will burden the poor, but 3) go ahead and tax food served and consumed in a restaurant since people who can afford to eat out can afford the tax. Also, I would assume that ordering to go and then eating in puts the restaurant in the position of having broken the law! Any tax lawyers or tax lawmakers out there? If so please explain all this.
July 30th, 2006 at 10:02 am
William,
How could it put the restaurant in the position of having broken the law if the customer deceives them about whether or not they’re going to stay in the restaurant? Are they supposed to maintain surveillance of customer’s who order food to go and then confront the customer if they stay in the restaurant to consume the food? “Excuse me, sir. You got your order to go and you’re clearly dining in. I’ll need your to pay 55 cents or else leave this establishment.” Not likely. It’s not the restaurant’s responsibility to enforce such a rule if it exists and they don’t have the time to do so anyway. They’re too busy frying up 4 dollar burgers for minimum wage.
July 30th, 2006 at 11:57 am
Mechanimatic
You may be correct, but I’ve seen it happen in a local store. The owner confronted a couple that did just that and kicked them out of his store! Aslo, visit http://www.boe.ca.gov/invest/salestax.htm and you will find that: 1) The responsibility for paying the sales tax is upon the seller (retailer), and 2) , any person who evades the reporting, assessment or payment of sales taxes that would otherwise be due may be guilty of sales tax evasion. Violators are subject to fines and/or jail time. I based my opinion on that.
July 30th, 2006 at 1:35 pm
Here in The Netherlands (yes we’ve got McDonals!) we don’t have ‘Eat In’ tax. Even we don’t have plastic chairs, there are wood chairs in here. The only thing we both have at McDonalds, Europe ans America, is that stupid clown :-)
July 30th, 2006 at 7:22 pm
Lucas,
My experience is that American restaurants are better in places other than America. I recall dining at a Pizza Hut in Scotland (my one taste of home amidst several weeks of native food experiences) and it was an actual restaurant, not the hokey Disneyland-style restaurant you will find in the States. And they served some tasty hard cider rather than just the usual fountain drinks.
William,
I can’t speak to your experiences, except to say that it sounds as crazy as telling old people they can’t dine in a Chuck-E-Cheese restaurant because they’re not accompanied by children. Then again, what you say is believable based on my experiences living in California. The second best thing I enjoyed discovering in the state of Oregon is no sales tax. The first is my fiance.
July 30th, 2006 at 8:22 pm
Just got Happy Meals earlier this afternoon at McD’s to go. They charged me a “take out tax”. I can’t remember exactly what it came to but I looked specifically at the receipt to see if I was charged anything. I was more concerned with getting three Captain Jacks for the kids than hanging onto the receipt. I believe that some of the posts have said exactly as I suspected right from the beginnning, that it’s just the way they collect their sales tax.
August 2nd, 2006 at 8:18 am
Just wanted to mention that here, in South Carolina, as well as in Arkansas (where I used to live) there is sales tax on groceries as well. Many states do not add sales tax to groceries, but two of the ones I’ve lived in do. Just another data point for you.
August 3rd, 2006 at 5:46 pm
I know that some states charge a tax if you eat in a fast-food restaurant vs. take-out. I think it’s just their system and they don’t adjust the text-side of things for states/regions that don’t do this. I live in Indiana and it’s the same, but I think Ohio was different.
August 21st, 2006 at 1:03 pm
A solution cannot be found for any problem if the problem is not clearly understood. It should be no different that understanding cannot be attained for any issue if that issue is not clearly stated.
I just recently noticed that two double cheeseburgers for $1.00 ea was creating a 16 cent “tax” on my receipt which didn’t match what my brain figured it would be…12 cents (6 cents “tax” for each one dollar bill). Admittedly, I have not officially researched the codes, regs, statutes etc., but I’ll bet a kings ransom that the Indiana sales “Tax” is still 6%.
So what has caused all the attention? In other words, what is the clearly defined issue? Alot of discussion has left the tracks and resulted in confusing and unrelated conversations as to what is troubling about this “tax”. If the issue is defined, I’m sure the information shared among all who have commented would be educational if not at least more insightful!
Try this out as a more clearly defined issue. Did you notice I enclosed The word TAX in quotations? Or are we all still worried about such issues as what the franchise decides to label the line-item…or maybe it’s that one state may have a different tax than another state…let’s apply for a refund when we file our 2006 returns because our tables were not clean AND the food was not hot! I would focus more on the simple fact that this unknowncharge or fee is causing me to doubt my math skills and, more importantly, I think it’s deceptively being hidden in a line-item to look like a “TAX” in hopes that most consumers will never notice.
If corporations want to call it “TAX” then “representation” dictates that this additional money is an un-solicited gift to government. Otherwise, I question
the integrity of using deception for profit if not the legality of implying that
“THE GOVERNMENT MADE US DO IT!”
August 23rd, 2006 at 11:10 am
Fallow-up to my last entry…
I certainly learned alot in the last couple of days! It took just a little digging around to clarify this issue for me. Obviously sales taxes and rates are varied throughout the country. The trick is finding the additional local ordinances affecting the final rate of tax. For the town of Westfield, Hamilton county Indiana I found the fallowing;
Indiana Sales Tax 6%
Hamilton Co. Ordinance 06-01-05-B
Food and Beverage Tax 1%
Westfield Municipal Ordinance 05-21
Food and Beverage Tax 1%
It is legitimate and legal to charge a total of 8% tax on one line-item pursuant to IC 6-9-35-11…blabla blabla blabla.
I will admit that combining all these taxes on one line-item made me suspicious only in that I was unaware of the Ordinances. The text of these Ordinances refer to the NFL and “successful economic developement”. It would have been nice if a separate line-item was used, but I suspect that would be far too costly and probably bring the wrath of environmentalists.
The decision by franchises to ‘code’ the tax line for tracking purposes may be helpful to them, but obviously created suspicion and eventual discontent with some patrons…must be a corporate white-collar out there somewhere thinking “WOW, I never saw this comi’n…I’ll have to worry about it later. I’M LATE FOR A MEETING!”
I was certainly off the mark in my first entry. The government DID make them do it! Hope this helps others…I’m hungry…I think I’ll order the super-sized ‘Humble Fries’:)
October 3rd, 2006 at 6:19 am
I did a little research and CA does not require Sales Tax on food. Now this is dicey… because if you go to a restaurant, you get charged tax for the “service”. It turns out one way to look at it is if you were to serve a cold sandwich, where you merely put the pieces of the sandwich together, that can be non-taxable if taken “to go”. If you serve a hot sandwich it’s always taxed.
I ran into this at Dairy Queen. The kid working behind the counter told us our blizzards and ice cream cones are not taxed if we say we are getting them “to go”, no matter what we ended up doing.
Are these businesses correct? Not really sure… I’m actually not sure if _they_ are sure. Here’s another article trying to address it:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2006/06/07/BUGD3J8TVF1.DTL&type=business
As you can see in the article, the state board doesn’t even bother getting accurate numbers, they just screw the restaurant owner. So, can’t really blame them for just overcharging everyone.
Specifically, there is no mechanism in CA law to recover sales tax if you’ve been improperly charged. McDonalds would be presumed to be collecting the tax in good faith even if they charged it for, say, ice cream cones. Only when someone is grossly and willfully mischarging do you have a case… and you’d have to go to court anyways.
March 12th, 2007 at 8:53 pm
Even though it says “dine in tax” or “take out tax” it IS NOT a tax. It’s a fee that McDonald’s is charging. I called them and they say it is to differentiate how to package the food. I think they are wrong to call it a tax. A tax to me indicates that it is government mandated and that it’s going to be paid to the state. My answer to them was you can differerentiate how to package the food without an extra charge. It is the same wether you eat in, carry out, or drive through. In Indiana it is 6% the same as our sales tax. Prepared food cannot be taxed in Indiana (I know state laws vary). If they want to make more money they should just raise their prices not sink down to adding a bogus fee.
March 29th, 2007 at 12:29 pm
The Point-of-Sale guy got it right. The post previous to mine (Tammy’s) is just wrong. While it’s true it helps differentiate for the food handlers whether the food is for In or Out, rest assured McD’s as well as all the other restaurants submit their taxes just like everyone else. Don’t you think that it’s ironic it’s, “the same as our sales tax.”
As another POS technician, we commonly set up In/Out taxes because they’re NOT always the same. As some have stated, it’s 0% for take-out/drive thru and whatever the current state/municipal/city tax is for Eat in. I believe Ohio is popular for this practice.
August 7th, 2007 at 10:40 am
I live in Ohio.
What are you guys bitching about?
First of all, if you eat in ANYWHERE there is tax… you’re using their facility…
and last I knew, pop got taxed no matter what, as it is not food.
August 30th, 2007 at 11:23 am
I just visited a McDonalds in Washington State and got charged a eat-in tax and a sales tax. Won’t do that again.
September 3rd, 2007 at 9:31 pm
The tax is charged if you eat in or go through the drive through of McDonalds. I cannot get a straight answer from anyone at McDonalds corporate office. I will no longer go tho McDonalds for 2 reasons:
1) Because of theis tax
2) No one can explain it to me.
September 19th, 2007 at 8:24 am
I just had it out at the the Mcdon in E.O. NJ, and the workers could not exsplain the tax to me. But the manager did and it was the state sales tax. I was hot for a min though.
October 17th, 2007 at 5:39 am
I just went to mcDonalds in Evansville, IN were they charged 7% sales tax for a take out tax.So I called to ask why I was charged 7% for my take out.They first said there was a different tax but quickly changed it and said that I should not have been charged a differnet tax to bring my receipt back in and they will give me my money back.
October 22nd, 2007 at 10:31 am
Just picked-up an order at a McDonald’s that does NOT have any TABLES & CHAIRS and they charged me the EAT-IN tax!! (They just have a drive-thru and a walk-in counter ot order at).
Arlington, Texas
November 2nd, 2007 at 4:07 pm
WTF indeed. i was eating in Macdonald’s in New Jersey, they have a $.35 tax to eat in… AND A $.15 TAX TO EAT OUT!!!!!! THERE IS NO ESCAPE!
November 8th, 2007 at 6:09 am
It’s the same as government taxes goobers. If you look at the receipt it doesn’t list sales tax. They put it under Eat in and Take out Tax so the location can keep up with how many orders are inside and how many on the outside. No matter where you live, even if theres no state taxes, you’re still charged taxes to eat at resturaunts because its prepared food. For those who posted you got charged both, quit lying, that would be against the law and well you’d have a nice lawsuit against mcdonalds. If you go to mcdonalds place 2 orders for the exact same meal inside and take out. It’ll be the same price.
December 20th, 2007 at 9:40 pm
I work at McDonald’s and I can explain this. It’s just your standard state sales tax. it says “eat in” or “take out” tax just because of the way the POS system works–it’s weird in a lot of ways. There’s no charge for eating it there or getting it in a bag. Uncle Sam has to get his cut, that’s all.
As mentioned before, an order for Eat In or an order To Go will be the same price, and the tax will be the same. Try it.
February 10th, 2008 at 11:00 am
Rokstar - you ARE right. You do sound condescending. If you had matured to a higher level in your profession, you would know how to remove your specialized knowledge from the situation and realize that this TAKE OUT or EAT IN TAX label is confusing. I also work in IT (for 30 years) and one thing I KNOW is that there is no reason to present a user with information that is confusing. If McDonalds needs to differentiate between take out and eat in orders, I can suggest about 3 dozen other ways to do it than add it to the “tax” description. And you should be able to also. Fix the confusion instead of berating people for being confused.
March 15th, 2008 at 1:55 pm
I just purchased a burger and some chicken “nuggets” at a McD’s here in Glendale, Arizona. The receipt states: EAT IN TAX 0.27
After receiving the two items, I then purchased the exact same two items and asked to have it “rung up” to go.
The receipt states: TAKE OUT TAX 0.27
So… I am confused as I am SURE that I have seen different tax amounts charged at fast-food places ‘take-out’ versus ‘eat-in’. The reason I recall this is because some time ago the thought crossed my mind to tell the cashier a lie to save paying the tax. I didn’t actually do this, but thought about it, so am sure there WAS a difference. Anyway, I will drive over to a Phoenix McD’s to see what I get when I duplicate both of the prior orders. It may very well be that different cities charge differently as far as taxes for dine-in/take-out are concerned. I might post the results later.
April 3rd, 2008 at 9:40 am
its sales tax, the inside or outside is just for them to know where it was eaten.
May 7th, 2008 at 11:36 am
THEY ARE NOW CHARGING EAT IN TAX NOW LEAVE YOUR TRAY FOR THEM TO PICK UP.
May 14th, 2008 at 1:02 pm
In Illinois (except Chicago & some other Cities that add their own taxes)the State sales tax is 6.5%. You will find that at MCDonalds and other Fast Food places, Convienence stores, etc., the majority of their electronic cash registers do not reflect the 6.5% and instead, the electronic cash register is programed to “round it off” to 7%. Another half cent profit per sale collected and kept by them. Some older electronic cash registers will actually figure the 6.5% tax but they are being replaced. As you can see by these posts, not too many of the public question “EAT IN” or “TAKE OUT” Tax. This all started back when “pocket calulator” use was allowed in the schools and our children were no longer taught to do math in their head or on paper. Ever notice how many of your friends calculate a waitress tip now on a small calculator in their cell phones because they are unable to figure 10% or 15% in their head?
May 15th, 2008 at 10:39 am
Are you all retarded? Eat in Tax and Dine in Tax are all just “Sales Tax”. I am assuming that is McDonald’s way of telling the servers whether to bag it or put it on a tray. I have never read so many stupid responses in my life. Are you the future of this world?? I hope not.
May 15th, 2008 at 10:43 am
Here’s my problem. In Rockford Illinois the sales tax rate is 8.25% When I buy 1 item off the dollar menue I pay $1.09. No problem, they are just rounding up. However, when I buy 2 items for $2.00 the bill is $2.19. It should actually be $2.17 or $2.165
July 17th, 2008 at 11:13 pm
Today I noticed a “Take Out Tax” on the receipt from McDonald’s.
…and then they did not put bacon on my bacon, egg, cheese biscuit that they charged me for. This is the second time in a row.
Someone is either eating the bacon or I keep going there on the shift of someone who forgets to add it.