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No Such Thing As a Tax-Free Lunch At Google?

Posted by timothy on from the nothing-but-beans-and-rice-your-honor dept.

theodp writes "In search of the best corporate cafeteria in the world, Gourmet Live's Tanya Steel visited the Googleplex, where she found Petaluma chicken cacciatore, porcini-encrusted grass-fed beef, whole-wheat spaghetti pomodoro, and Parmesan-creamed onions on the menu in one of the search giant's 25 cafes. So, must all good things come to an end? The WSJ's Mark Maremont reports that it's debatable whether Silicon Valley's daily fringe-benefit meals are taxable, and the issue is now on the IRS's radar. 'What would a food tax on Google's meals look like for the average employee?' Maremont asks. 'Assuming a fair-market value of between $8 and $10 per meal, a Googler chowing down two squares a day could get dinged for taxes on an extra $4,000 to $5,000 a year.' That'd be just fine with UF tax-law Prof. Martin J. McMahon. 'I buy my lunch with after-tax dollars,' said McMahon. 'And I have to pay taxes to support free meals for those Google employees.'"

3 of 631 comments (clear)

  1. Here in Canada ... by DavidClarkeHR · · Score: 5, Informative

    In Canada, this is already going on.

    We (as a country, and yes, I'll speak for my country here) tend to tax things that employees receive as part of doing their job. Like, income. Company car usage on personal business. Certain types of business accommodation perks.

    Unless google is willing to open their cafeteria to the world, getting "free" meals as part of your job is, well, part of your job. I think most people can agree that the US tax system has a few loopholes - but why is it crazy to expect people to pay taxes on their income?

    --
    - Nec Impar Pluribus, or so I'm told.
    1. Re:Here in Canada ... by Steve+Hamlin · · Score: 5, Informative

      "Should I be paying taxes on what those items would cost me if I had to pay for them?"

      Yes.

      Deminimis rules apply, but you are generally taxed-as-income on the compensation you receive in exchange for your labor.

      That includes cash wages, health care benefits paid by your employer, 401k matching, car allowance if you are not driving miles for work purposes, $1,000/year worth of gym membership, or $5,000/year of food.

      Would you do the job for only popcorn? Of course not. Would I take a lower wage if my employer paid my mortgage? Yes, and I should be taxed on that. Somewhere in between those extremes are what IRS Revenue Rulings define. And in this case, the IRS is taking a look at the changes in how companies provide food to employees, and is redefining the rules of what counts an "income".

  2. Re:slow news day? by Alascom · · Score: 5, Informative

    As a Googler, I can tell you we ARE taxed for meals, to the tune of $4,650.00 in 2012. The company then pays a 'gross up' to make it a non-event for the employees. So all this complaining about 'free lunches' is entirely off-track, and this Professor of Law has demonstrated he doesn't know how to do basic research before talking.