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No Such Thing As a Tax-Free Lunch At Google?
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.'"
On the otherside, an employer or contractor can 'expense' their meals if it's business related. However, I believe there is a percentage cap, based on overall income.
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I'm pretty sure that Google's advertisers pay Google to pay for the free meals for those Google employees. Without prejudicing any other case for equitable treatment, just because someone isn't paying taxes doesn't mean they're robbing you. It's the fruits of their own labor. In the absence of laws to the contrary, is Google not entitled to dispose of their money as they see fit?
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So if I go home and eat my lunch ... no taxes since you don't get taxed on food (maybe in California, you guys are nutjobs ;).
But if I eat it at work, where a cook makes my meal instead of my wife ... that I get taxed for?
Lets see, whats better? Me driving home for lunch, wasting gasoline, road wear and tear and pollution ... or staying at work for lunch?
The UF tax law professor just needs to be shot. He's just a whining bitch. Its not like he has a real job, he's a fucking professor, he doesn't actually work anyway. Two classes a week that he sits in while his assistants do all the work or someone else lectures. String his ass up from a tree until he stops talking. No, I don't like lawyers, especially ones who like to whine about how they are treated unfairly while essentially doing nothing but draining otherwise useful resources from the world and our budget.
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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.
... and while we're at it let's tax free coffee, free snacks, hell even all that free water workers drink on break.
Even better, let's tax all time spent on break -- I'm sick of supporting lazy workers on break with my hard-earned-no-break hours!
Say the professor prefers tea & fills his teapot from his university's tap. Does he have an individual meter so that his usage is not coming out of the pocket of the rest of the faculty or the students? If a corporate lunch is an untaxed benefit shouldn't he have one for his tea? Shouldn't he also have one for the toilets he uses? How is his use of these common resources any different from free lunches -- or is it just a matter of time until this becomes the norm as well??
Democracy is a sheep and two wolves deciding what to have for lunch. Freedom is a well armed sheep contesting the issue
The argument is that because Google employers are not buying their lunch, then they're not contributing to the city/county/state tax revenue pool.
"Huh?" you say.
If Google's kitchens sold those lunches to the employees then the employees would pay tax on the purchase of those lunches.
Thus by not requiring people to purchase the food and thus pay tax on the purchase, they're depriving the city/county/state of sales tax.
From an IRS perspective, Google is effectively providing people a "fringe benefit." The benefit here is food. The food costs Google some amount of money to provide or prepare so it obviously isn't worth nothing. Thus the IRS is within its rights to argue that Google is providing people with a "fringe benefit."
I'm so sick of the expression "cost the government". It's a weasel expression intended to convince people that all money belongs to the government first and they let you have some only after they've spent whatever they want. Bulldinky. Every day you hear about how things have gotten too expensive. Food? Too expensive. Coffee? Too expensive. Air travel? Too expensive. Higher education? Too expensive. Gasoline? Too expensive. Electricity? Too expensive. Insurance? Too expensive. Rent? Too damn high. Healthcare? Too expensive. Why the hell isn't government too expensive? IMHO, if the government got rid of baseline budgeting and actually reduced expenses across the board, those of us who pay for all that crap might not be hell bent on looking for every write-off under the sun.
First is the blatant unfairness: why do Google employees get tax-free lunches when, someone else (say, for example, me) has to pay for my lunch with post-tax income.
Jeez, take it up with your employer. Why do people feel that if they can't get ahead themselves, they need to try to take others down?
The rules are clear if you are working on an oil rig or a deep-diving submersible --- any site so remote and secured that only your employer can keep you fed and housed and the costs are astronomical.
The five-star buffet in Mountain View?
That is taxable as income.
This is not a new issue. Although the concept of tech companies offering their employees gourmet catered dining is relatively recent, restaurants, hotels, bars, and other hospitality businesses have offered their staffs free meals since time immemorial.
In those cases, the US federal tax code allows a business to exclude the cost of meals from its employees' income only as long as the meals are eaten on the employer's business premises and they are provided "for the employer's convenience."
A company like Google might have a hard time proving the latter clause. A recent job posting for a "Food Experience Design Manager" would seem to suggest that mealtimes at the Chocolate Factory's over 120 cafes are designed as much for its employees' enjoyment as to bolster the bottom line:
As the Global Service and Experience Design Manager, you think about everything that goes into how Googlers interact with food. From our ever-popular micro-kitchens to multi-course meals at cafes, the design, layout and experience of eating at Google should promote healthy habits and social serendipity for Googlers. Our food venues need to support the healthiest, happiest workforce on the planet.
Similarly, Yahoo! started offering its employees free food last August, with a spokesperson telling El Reg that the move was "part of how Yahoo! looks after its talent." But meals offered as a recruitment or retention tactic don't count as being ''for the employer's convenience'' either, according to experts.
Tax man to take a bite of tech employees' free meals?
Who says "No Thanks" to a meal that they didn't have to pay for? Any college student will tell you the best meal they had was "free" not because of the food quality, but because it was free. I'm assuming Google just has a cafeteria that employees can just walk into and get a meal or two during any given day while they are working, and that this is an every day occurrence. I can honestly say, I'm a tad jealous, but I see that as a perk of working for that company. If the IRS is going to tax lunches, CEOs across the nation will have to start paying taxes for their elaborate lunches. But wait, so would every college student who didn't pay taxes on food they ate. Oh and what about all those free day care services some places offer or exercise room, shouldn't those perks be taxable also? Wouldn't this then also impact me going over to a friends house and receiving a meal from a party? I didn't pay for it so I wasn't taxed on it.
This is a slippery slope, and one that if pushed as taxable then it opens up a whole new can of worms. If Google is paying the taxes on the food and upon purchasing the food for giving away, wouldn't taxing the employees be double - taxation?
I'd love it if I could reap such awesome benefits, but I do not begrudge a Google employee from enjoying the perks of working for Google. I'm happy to learn that a company that large is still so generous to their employees.
Life takes interesting turns, but the most interest is when you're off the beaten path.
Did he bother to google (heheh) the IRS Publication for this? (warning, PDF). Scroll down and:
The fair market value of meals or lodging furnished to an employee by an employer may be nontaxable to the employee. IRC Â119 provides an exclusion for meals and lodging under certain circumstances. Cash provided for meals is not excludable under this Code section; however, under certain circumstances cash can be excluded as a de minimis fringe benefit. IRC Â119
And a few other paragraphs clarifying this seem to indicate that Google and all the other Valley companies that do this are following the rules just fine. Sheesh! I'm not even a lawyer and certainly not a friggin' professor of such.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
Not charging employees income tax on an employer-provided lunch is "letting them walk off with the henhouse"? And coporations complying with tax laws in order to not pay more than they're legally required are "malefactors"? I'd argue that they'd be in dereliction of their duty to shareholders if they *didn't*.
The thing is that in your examples the law is pretty unambiguous. If the company is paying for your home and car and they aren't used for work, it's considered employee income and is subject to regular income tax. Meanwhile, food given to regular employees at work, like factory worker or doctor eating at the on-site cafeteria, or the soldier in the field eating an MRE, is normally not counted as a benefit for taxing purposes. The idea behind the exception was that the employer couldn't afford to give the employee time off to leave facility to eat. The question is whether or not this rule should also apply to tech workers who have a more flexible schedule.