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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.'"
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?
The World Wide Web is dying. Soon, we shall have only the Internet.
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.
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
Well Google's searches obviously provide a benefit to us as users and we pay nothing for them, therefore we are getting income, which by the same argument should be taxed. Does that mean we owe the IRS every time we do a google search?
Careful with names containing L slashdot.org/~AiphaWolf_HK slashdot.org/~AlphaWoif_HK slashdot.org/~AiphaWoif_HK
An audit of search results could be embarrassing. Clearing your search history would be tax evasion.
They (statistically as a group) pay far more of their "share" than most. Certainly more than the professor who complains about having to subsidize their lunch - especially ironic while he eats lunch at a state-subsidized university's cafeteria.
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"?
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.
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.
Every time I hear "fair share", it's from someone who doesn't pay nearly as much in taxes as the people they are bitching about.
How about we bitch about cutting spending rather than finding new ways to make people pay more to our genocidal government?
I have the option of eating at my state university's cafeteria, but I get charged for the privilege at least as much as the students do.
Hail Eris, full of mischief...
E pluribus sanguinem
How on earth is Google supplying free meals not "for the convenience of the employer"? Having free meals on-site means more employers will stay on-campus, rather than leave the campus for probably lengthier lunch breaks, plus they're more likely to share meals with other employees, discussing work issues. You think Google is giving out free meals out of pure generosity?
If corporations could convince employees to forgo living in their own houses, and instead live on-campus in dormatories, they'd do it in a heartbeat. It's exactly what they do in China. You get more work out of people when they don't have a personal life outside of work.
So, by your crazy logic, should smaller companies that have free sodas and coffee for employees require employees to account for every single cup of coffee they drink there, and pay taxes for it? How about companies that provide elevators for employees? Should non-disabled employees be required to pay taxes for every elevator ride they take, since they could after all just take the stairs instead? How about companies with parking lots? Should employees be required to pay taxes for the luxury of being able to drive to work instead of taking the bus, and not have to pay for parking?
If you drive a car, I'll tax the street
If you try to sit, I'll tax your seat
If you get too cold, I'll tax the heat
If you take a walk, I'll tax your feet
"Flyin' in just a sweet place,
Never been known to fail..."
Are we going to go after schoolchildren that trade desert cups at lunchtime because one has a higher value than another and can be called taxable income?
Do you think its worth the IRS's time to pursue 8 year olds for capital gains made by trading dessert cups on the underground schoolyard dessert cup markets? Why they might have dollars of undeclared income! Couple that with their allowance... /faceplam
If I pay the check for a date does that mean she has to declare it on her taxes?
When you say date do you mean prostitute? If so, she an independent contractor. Is the meal a business meeting? It may be a deductible expense for you.
Otherwise, you may want to look into gift taxes but your likely in the top 1% of the top 1% if you are running into your annual exclusion limits taking someone out on a date.
If the issue is whether the lunch benefit is taxable, perhaps buying the food from a supplier should already pay the tax.
That's not the point. If a valuable benefit is being provided to the employees, then the value of that benefit is counted as income, and income taxes are due. If you get a company car and you use it for personal driving then its a taxable benefit.
The only question is whether providing lunch is "work related" in the same way that providing you office supplies is "work related". If the company brings in pizza on a night everyone is working late... then no the pizza shouldn't be considered a taxable benefit. But pretty much everything with taxation works on limits and exclusions and thresholds. A gourmet cafeteria could easily cross the threshold into taxable benefit territory.
And lets say that it does. Its still a screaming good deal.If eat out $5000 worth of restaurants in a year... then I'm out $5000, plus I pay another $1000 or so in income tax on the money. I'd be delighted to not have to pay the $5000 and just have to pay the $1000. Hell, I wouldn't blink at taking a $3000 dollar reduction in income for a $5000 perk like that.
Crying over income tax on taxable benefits is nuts.
Employment relationship? Are you fucking stupid? Since when is taxation based on employment only? The government wants to tax any and every transaction where net GAIN occurs. Win the lottery? Pay up. Found hidden treasure in the backyard, pay up. The school children example is absolutely relevant. If a child has a net gain by trading his dessert cup, that's GAIN and therefore technically taxable.
And since when do software engineers opt to take their salary in the form of food? Meals are a fringe benefit designed to keep employees happy. Will you tax free on site gym usage as well? How about fancy, office chairs? Or how about taxing free legal advice that some companies offer? How about taxing employee discounts on the products the company sells? Company holiday parties? Tax that bitch. You know what, you and IRS can go eat a bag of dicks. Stop taxing everything under the sun.
Sure, we can stop taxing everything. As soon as a bunch of people decide that we shouldn't be giving food and money to people who don't work or are disabled, provide fire and police protection, build highways, and a bunch of other shit that people keep asking the government to provide.
CEOs have to pay for their company cars if they use them for personal use. It's not unusually for people that own a business to have the business pay their bills, so why shouldn't that payment be taxed?? Obamacare has decided to tax overly generous health care plans.
If a benefit becomes a significant source of savings for employees, such that salary could be reduced because the benefit makes it worthwhile, why shouldn't it be taxed?? When the government raised income taxes, companies switched to options and benefits to compensate high-salary employees because it became cheaper.
Google providing food to it's employees is a method to retain workers without having to pay them more, and may encourage employees to hang around the office and work more. So Google gets the benefit of buying food, which they don't have to pay unemployment tax or medicare tax or medicaid taxes on and use that as 'payment' to work there instead of shelling out bigger paychecks.
There is a significant difference between providing a lunch every month of sandwiches, and providing free food every day. While I don't completely agree with taxing this as income on a personal level, it is consistent with existing taxes.
But, like the Occupy Anything hypocrites, feel scream out to tax everyone but me. Or feel free to scream out that taxes need to be cut without offering to reduce spending on social programs.
I rarely read replies, it's my opinion and if you thought about your opinion a little more, I'm OK with that.
A single payer health care system would free employers from the burden of providing health care, allow entrepreneurs to pursue their own business goals without fear of losing health coverage, and provide massive cost savings by allowing everyone to receive preventative care rather than having the 50 million uninsured people end up in the ER once their condition has deteriorated to the point where they can no longer ignore their illness.
The role of an emergency room as a health care center is there because they are required by law to not refuse treatment and that many people somehow figure out how to avoid paying for medical costs. It is skewing the way that people seek health care assistance when
The real "solution" is to simply let doctors be entrepreneurs and for them to charge reasonable professional rates for services rendered in an open competitive marketplace where the patients are the customers. All of the messes in the health care industry are precisely because this doesn't happen and the government trying to meddle into that client-practioner relationship.
Thank goodness engineers aren't paid by insurance companies and government agencies to build homes and businesses.... at least in most cases. Even more so, that such activity is seem as "essential to life" and deemed something that should be nationalized with all engineers encouraged to become government employees.
I like how you edited out this part of my comment:
Unless you decide that anyone who can't pay for medical care should die, health care becomes a shared cost to society.
You and I disagree fundamentally on whether or not someone should die because they're broke. I don't think they should, you clearly think they should.
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.
I can confirm this. My understanding was that the IRS negotiated an agreement which required taxes to be paid on meals at the smaller campuses, because on larger campuses the time it would take for Googlers to go off-campus to eat was accepted by the IRS as sufficient business value to justify it as a business expense. But that may be incorrect, or maybe the IRS changed its mind later.
In any case, I work in the Boulder office and I do pay income taxes on my meals, and Google then offsets it with a grossed-up payment so the tax doesn't impact my income.
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Those things aren't permanently given to employees.
Irrelevant. Those are services provided which have a monetary value. There's lots of places where you have to pay $5 or $10 a day to park your car. Elevators cost money to operate, if for no other reason than the electric power needed.
Never worked anywhere where soda was free, I even worked in places where coffee/tea were not gratis.
There's tons of tech companies where sodas and other drinks are available for free; this was particularly true during the dot-com boom, probably less so now.
There's tons of places where there's coffee pots available to use, as well as microwave ovens. These are free even if you bring in your own food items to use in them, but that costs the company money for the electricity.
But these costs (coffee/tea/water) are almost negligible compared to lunch.
Wrong: a coffee drink at Starbucks can cost $4. You might say that Starbucks is overpriced, but that's irrelevant: someone obviously thinks a coffee drink is worth $4, and that's a large fraction of a lunch. It could be argued (by the IRS) that those free coffees are also worth $4, and employees should be paying taxes on them.
But an additional difference: lunch is personal time.
No, it's not. There's no such thing as "personal time" when you're a salaried employee.