Restaurants’ Indirect Tax Headache

Successfully operating a restaurant takes grit and passion. We do not need to tell you that it is hard work. Rather than focus on the daily challenges, let’s talk about taxes, specifically “indirect taxes.” After all, the restaurant industry is a frequent target for audits, and since indirect taxes have become a crucial revenue source, governments are stepping up enforcement, intently focused on indirect tax collections. Restaurants, bars, taverns, delis, pizzerias, and other establishments, from fine dining to dive bars, are all five stars on the state auditor’s audit rating scale. With the numerous dizzying indirect tax rules that apply to restaurants in particular, let alone the task of actually running the restaurant, it’s not hard to see how mistakes can easily be made. And those mistakes can be costly.

Here are several key points every restaurant owner, operator, and investor should understand about indirect taxes:

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