Uber Eats can help restaurants reach more customers without building their own delivery operation. It also adds another layer to sales tax management.
Depending on where a restaurant operates, Uber Eats may collect and remit the sales tax on an order. In other cases, some or all of the collected tax may be passed back to the restaurant. The restaurant must then report and remit the applicable amount.
Understanding how Uber Eats tax works starts with identifying which party is responsible for each tax charged on an order. Restaurants also need to make sure their Uber Eats reports, POS records, and sales tax returns reflect the same treatment.
Does Uber Eats collect sales tax?
Uber Eats generally calculates and collects applicable sales tax from the customer when an order is placed through the platform. What happens to the collected tax depends on marketplace facilitator laws and the rules of the state or local jurisdiction where the sale takes place.
In states where Uber Eats operates as a marketplace facilitator for a particular tax, the platform may be required to:
- Calculate the applicable tax
- Collect the tax from the customer
- Withhold the tax from the restaurant’s payout
- Report and remit the tax to the appropriate taxing authority
Uber Eats identifies tax that it keeps and remits as Marketplace Facilitator Tax in its Payment Details Report.
When Uber Eats is not responsible for a particular tax, the platform may still collect the amount from the customer. That money can then be returned to the restaurant as part of its payout. The restaurant is responsible for reporting and remitting the tax.
This means that seeing tax on an Uber Eats receipt does not, by itself, reveal which party will send the money to the government.
What are marketplace facilitator laws?
Marketplace facilitator laws assign certain sales tax responsibilities to businesses that operate online marketplaces. These laws generally require a qualifying marketplace to collect and remit tax on taxable sales made by third-party sellers through its platform.
All states with a statewide sales tax have adopted marketplace facilitator requirements. Washington, D.C., Puerto Rico, and some local jurisdictions in Alaska also have marketplace collection rules. However, the thresholds, covered transactions, registration requirements, and reporting procedures are not identical in every location.
For restaurants, Uber Eats may be considered the marketplace facilitator for orders placed through its app or website. When the platform is responsible for the tax, the restaurant generally does not receive that portion of the customer’s payment.
Marketplace facilitator laws can reduce the amount of sales tax a restaurant must remit on its own. They do not necessarily remove every tax responsibility associated with third-party delivery orders. Some local taxes, special food and beverage taxes, or other charges may receive different treatment.
Who pays sales tax on Uber Eats orders?
The customer pays the sales tax charged on an Uber Eats order. The main compliance question is whether Uber Eats or the restaurant must send that money to the taxing authority.
There are three common possibilities.
Uber Eats collects and remits the tax
In many marketplace facilitator situations, Uber Eats keeps the applicable tax collected from customers and remits it directly to the taxing authority.
The Marketplace Facilitator Tax may appear as a negative amount in the restaurant’s Payment Details Report because it is being withheld from the merchant payout. The customer still paid the tax. The negative figure shows that Uber Eats retained the funds for remittance.
Uber Eats collects the tax and sends it to the restaurant
When marketplace facilitator requirements do not apply to a particular tax or transaction, Uber Eats may return the collected tax to the restaurant.
The restaurant must account for those funds and include the applicable sales on its return. It must also pay the tax by the jurisdiction’s deadline.
The amount deposited into the restaurant’s bank account may be lower than the original order total because Uber Eats has deducted commissions, fees, refunds, or other adjustments. Sales tax is generally based on the taxable sale rather than the net payout after platform fees. Restaurants should therefore avoid using the bank deposit alone to determine taxable sales.
Uber Eats and the restaurant each remit part of the tax
Some orders involve what Uber calls “split tax.” This occurs when Uber Eats is responsible for certain taxes but returns other collected taxes to the restaurant.
For example, Uber Eats might remit a tax covered by the applicable marketplace facilitator law while returning a separate local tax to the merchant. The restaurant would then remain responsible for that portion.
Restaurants can determine whether tax was returned by reviewing several columns in the Payment Details Report. These include Tax on Food Sales, Tax on Adjustments, Tax on Promotion on Food, and Marketplace Facilitator Tax.
Because multiple outcomes are possible, restaurants should not assume that Uber Eats handles every tax charged on every order.
Make your sales tax less taxing with DAVO.
Why Uber Eats tax responsibilities differ by location
Sales tax by state can vary. Restaurant orders can also be affected by county, city, and special-district requirements.
Prepared food may be subject to a general sales tax, a meals tax, or another food and beverage tax. Some jurisdictions administer state and local taxes together. Others require separate reporting or payment.
State marketplace facilitator laws can also define delivery platforms differently. A law may cover the platform’s role in facilitating a sale while excluding certain delivery-only arrangements. The type of agreement between the restaurant and Uber Eats can therefore matter alongside the location of the sale.
Certain products introduce additional rules. Alcohol is a common example. Some merchants selling alcohol in certain states may not see sales tax information in the standard Payment Details Report and may need to contact Uber for clarification.
Delivery and service charges can also receive different tax treatment from one jurisdiction to another. A delivery charge may be taxable in one location and exempt in another. Restaurants should make sure their POS settings reflect the rules that apply to each charge.
A restaurant with multiple locations should review each one separately. Tax treatment may depend on the store location, delivery address, products ordered, and taxes imposed by the jurisdiction. Operators should confirm:
- Which taxes Uber Eats withheld and remitted
- Which tax amounts were returned in the payout
- Whether the order included a local or special tax
- Whether delivery or service charges are taxable
- How marketplace orders appear in the restaurant’s POS system
- Whether the treatment changes for alcohol or other regulated products
A tax professional or the applicable state and local tax agencies can help clarify requirements for a specific restaurant.
How to review taxes collected by Uber Eats
Restaurants can review tax information through the Payment Details Report in Uber Eats Manager. The report contains order-level financial information covering sales, adjustments, payouts, and tax amounts.
Uber Eats identifies the Marketplace Facilitator Tax column as the amount the platform keeps and remits on the restaurant’s behalf. Restaurants can compare that figure with the other tax columns to identify any amount returned to the merchant.
To download a report:
- Sign in to Uber Eats Manager from a computer.
- Select Reports from the menu.
- Choose Request Reports.
- Select either Payment Details or Payment Details (Item Level).
- Choose the date range and restaurant locations.
- Download the completed report as a CSV file.
Uber Eats allows restaurants to request Payment Details Reports covering up to 31 days at a time. Item-level reports can cover up to 15 days.
Restaurants should review these reports regularly rather than waiting until a sales tax return is due. A monthly reconciliation can make it easier to spot missing transactions, unusual adjustments, or unexpected tax treatment while the information is still recent.
Records should also be retained according to the applicable jurisdiction’s requirements. Useful documentation can include Payment Details Reports, weekly statements, POS reports, filed returns, bank deposits, and correspondence explaining unusual tax treatment.
How POS integrations can affect Uber Eats tax reporting
Third-party delivery orders may enter the restaurant’s POS system automatically or be recorded manually. Either method can create problems when the POS tax settings do not match Uber Eats’ actual treatment.
A POS integration may record the full sale and tax amount even when Uber Eats withheld the marketplace facilitator tax. If the restaurant includes that amount in its own liability without making the appropriate adjustment, it could pay the tax twice.
A restaurant may also exclude all Uber Eats tax from its records even though the platform returned part of the tax for the restaurant to remit.
The proper setup depends on the restaurant’s POS, integration, and jurisdiction. Restaurants should not automatically make every Uber Eats order nontaxable without first confirming which taxes Uber Eats remits.
When reviewing an integration, confirm:
- Whether marketplace facilitator tax is excluded from the restaurant’s liability
- How split tax is recorded
- Whether sales are recorded at the gross amount before platform fees
- How refunds, promotions, and adjustments change the tax
- How manually entered orders are treated
- Whether each restaurant location has the correct settings
Uber Eats reports should be reconciled against POS records after any integration or tax-setting change.
Make sales tax easier with DAVO
Uber Eats may remit certain taxes on marketplace orders, but restaurants can remain responsible for tax collected through dine-in sales, takeout orders, direct delivery, and other channels. They may also need to remit any Uber Eats tax returned to them.
DAVO by Avalara uses sales data from a connected POS system to automate sales tax management for eligible transactions. DAVO sets aside the sales tax recorded in the POS each day and transfers it to a secure tax holding account. When the return is due, DAVO prepares the return, files it, and pays the amount owed using the reserved funds, guaranteed.
Restaurant operators should first make sure their POS correctly distinguishes taxes remitted by Uber Eats from amounts the restaurant remains responsible for paying. Uber Eats orders should also be entered consistently so that the POS provides a complete record of sales.
Get started with DAVO today, and spend less time tracking tax funds, watching filing deadlines, and preparing returns.
Frequently asked questions
Does Uber Eats charge sales tax on delivery fees?
The tax treatment of delivery and service fees depends on the jurisdiction and how the charge is structured. A fee connected to a taxable food sale may be taxable in some locations, so restaurants should confirm the rules that apply to each location.
Are tips on Uber Eats orders subject to sales tax?
Voluntary tips are generally treated differently from mandatory service charges, but state and local rules vary. Restaurants should make sure tips and required charges are identified separately in their records and POS system.
Does a restaurant need a sales tax permit if Uber Eats remits the tax?
Possibly. A restaurant may still need to register, file returns, and remit tax on dine-in, takeout, catering, direct delivery, or other sales outside the Uber Eats marketplace. Marketplace facilitator collection does not automatically eliminate the restaurant’s broader sales tax obligations.
How do refunds affect sales tax on an Uber Eats order?
Refunds and order adjustments can change the taxable sales amount and the associated tax. Restaurants should confirm that each adjustment appears correctly in both the Uber Eats Payment Details Report and the POS system.
Do Uber Eats promotions change the sales tax calculation?
They can, depending on the type of promotion, who funds it, and the rules of the jurisdiction. Uber Eats reports include separate columns for tax on food sales, adjustments, and food promotions that restaurants can use when reviewing the tax treatment of discounted orders.
How often should restaurants reconcile Uber Eats tax reports?
Monthly reconciliation is a practical starting point, although restaurants with high order volumes may benefit from reviewing reports more frequently. Regular checks can uncover missing orders, incorrect tax settings, and unexpected adjustments before the next sales tax return is due.
What Uber Eats tax records should a restaurant keep?
Restaurants should retain Payment Details Reports, payout statements, POS sales reports, refund and adjustment records, and filed sales tax returns. Uber Eats reports provide order-level details for sales, taxes, fees, adjustments, and net payouts, which can help explain differences between reported sales and bank deposits.
Will a restaurant receive a tax form from Uber Eats?
Depending on its account activity and applicable federal reporting requirements, a restaurant may receive a tax form from Uber Eats. Tax documents are generally made available electronically through Uber Eats Manager by January 31, but restaurants must still maintain their own sales and expense records.
