Sales tax is typically applied to transactions for tangible goods and certain services that occur between a merchant and a consumer. Merchants act as agents of state government collecting sales tax from consumers and remitting payments to the proper taxing authority.
Today many restaurants are using 3rd Party Order Apps (3POA) such as GrubHub and EAT24 to attract new customers and increase their bottom lines. However, 3POA apps have the potential to create huge sales tax liabilities for the business if not handled correctly. This can result in costly fines and penalties that come straight out of the owner’s wallet and in the worst cases these excessive fines can be fatal to a business if left unchecked.