McDonald’s Eat-In Tax |
26 Comments |
Last week McDonald’s had a special promotion for their new McSkillet Burrito. On Thursday and Friday, they were giving away a free burrito. The commercial promoting it didn’t seem to have any fine print. I’ve never been one to turn down a burrito or a bargain, so there was little doubt that I would be there - both days if the burrito was good.
When I got there on Thursday, there was a surprise waiting for me. It was a free McSkillet Burrito with the purchase of a medium drink. Hmmm, the commercial seemed to lie, but since I was already there, I figured I’d try it out. For $1.49, a drink and burrito is still a decent deal. I grabbed the burrito to go, so I could come back home and get a few errands done. The burrito was decent - about what I expected for the price.
My wife had Friday off from work and she wanted to give this burrito a try. This time we had a couple of errands to run after breakfast so we chose to eat-in. To my surprise, the price was different than yesterday. I almost didn’t realize it. Since it was a different McDonald’s I figured that it may be a case of just one store owner charging more for medium drinks than another. That’s when I noticed something new on my receipt - Eat In Tax. Because I only spent a $1.49, it wasn’t a huge deal - 12 cents. However, on a larger order that 8% would certainly make a difference.
Next time, I think I’ll think twice before I say, “for here.” The seats aren’t that comfortable and the bag works as well as the plastic tray.
[Update: I noticed there are comments that seem to suggest that the “eat in” is just a poor label for a general restaurant tax. However, when I ordered the food to go the day before I didn’t notice this tax (or an equivalent “take out” tax). In fact, I remember paying with a dollar and two quarters.]
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March 7th, 2008 at 5:06 am
Are they allowed calling it a tax if it isn’t charged by the government? Do all restaurants charge that in the area?
March 7th, 2008 at 5:24 am
Just google for your explanation.
http://www.onedigitallife.com/2006/07/27/mcdonalds-eat-in-tax/
http://www.ripoffreport.com/reports/0/131/RipOff0131508.htm
March 7th, 2008 at 5:29 am
I have a feeling it wasn’t a tax for eating in. It’s probably the normal sales tax and they just marked the register location on the receipt. If you have a drive-through receipt, you might notice that receipt is different.
March 7th, 2008 at 5:45 am
Yeah, it just looks like the standard California 8% enormous sales tax. More like “Eat In - Sales Tax” as opposed to “Take Out - Sales Tax”.
Guess how many readers will tell you eating at McDonald’s will cost you more in healthcare down the road than the food cost
March 7th, 2008 at 5:51 am
It’s the same here in Ohio. Food is not taxed at the grocery store or at restaurants if you do take out. But if you dine in the restaurant then there is sales tax.
March 7th, 2008 at 7:51 am
I’ve noticed the same thing before. It’s a very poor way of indicating on the receipt whether the order is dine-in or to go. I remember the same thing when I saw TO GO TAX and I thought to myself why the hell are they charging me a tax just because I used the drive-in!??! I later performed the calculation realized that it was simply the sales tax, but was poorly labeled on the receipt.
March 7th, 2008 at 9:43 am
I live in NH, which has no sales tax but does have something called a “rooms and meals” tax. Prepared food (eat in or take out, hot or cold) gets taxed, while unprepared food (and any other store item) does not.
I used to work in a seafood restaurant that also sold raw seafood to go. Uncooked shrimp on ice sold by the pound - no tax. Precooked shrimp on ice sold by the pound - tax. You would not believe how upset some folks get when they see the receipt: “But NH doesn’t have tax!” Argh. I probably explained rooms and meals tax ten times a day.
Your state may have it’s own laws about restaurant food that require a tax when you eat in but not when you get it to go.
March 7th, 2008 at 10:22 am
I never heard of a eat-in tax. I’m sure McDonald makes thousand off of this. I guess every state has it’s rules
March 7th, 2008 at 11:03 am
The tax is likely coming from the state or the city. I’ve lived in several regions, including one that didn’t charge tax for carry-out but did for dining-in. Now I live somewhere that charges tax regardless (dine-in or carry-out).
I highly doubt that this is a McDonald’s only thing. I bet you’d see the same tax structure working at the Burger King (or whatnot) next door.
March 7th, 2008 at 11:40 am
The state legislature here in Maryland is currently drafting the cup-tax, coffee bean import-tax, drive-thru tax, eat-in tax, take-out tax, promotion-tax, VISA tax, and pretty much anything else you can think of-tax.
That said… They accidentally put an extra burrito in my bag at the drive thru. I got my burrito, large coffee and an extra burrito for the price of one coffee. No complaints here.
March 7th, 2008 at 12:57 pm
AJ, I’m sure the “accident” was an advertising scheme from a particularly zealous restaraunt ;). Now that you’ve tasted it free, will you go back and buy one?
Taxes are extremely complex. Also, if you’ve never worked at a restaurant, receipts make a bit more sense to the employees than the customers. As far as the store itself charging extra for dine-in (or anything on those lines), they would be required to increase the price of the actual item (i.e., when you call the airline and they say “prices may be lower online”). They don’t have the power to levy a tax, and all it takes is one tax-smart government official to see a receipt and the company is done for — so I doubt most places - especially large chains - will brave such an atrocity. No, this time you CAN blame the government. And Canada. (why not? they can’t fight back)
March 7th, 2008 at 4:23 pm
whatever it’s for, that’s one bogus naming convention. but hey, it makes for a great post right? that snazzy little receipt pic was enough to reel me in
March 7th, 2008 at 6:07 pm
you really need to correct this post because it’s not true. that tax is just the regular sales tax and the to go is just for the food handlers to know how to pack your food. i know you said you did not notice it before but next time you get your food to go, why don’t you scan the receipt and show us if there’s not a “to go” tax instead….which is the exact same as the eat in tax. in other words…it’s just the SALES TAX!
March 7th, 2008 at 11:02 pm
In CA you pay tax on food “eaten in” a restaurant, but no tax on take-out. Been that way for over a decade. Some restaurants offering both services become lax about how they ring it up, classic example (on a local TV news show) was 2 Starbucks which were across from each other, one charged [correctly], the other didn’t. Obviously not well enforced in places like that.
March 8th, 2008 at 1:10 pm
Just wanted to echo what the others have said… I worked at McD’s in high school and that’s jut your standard tax. I don’t remember what the drive thru receipt says instead of “eat in” but it is the same amount of tax.
We had people start fights with us daily over the “eat in” tax and always had to show them that the drive thru people got charged the same percentage.
March 8th, 2008 at 5:20 pm
I’ve been confused by that same thing before. McDonalds probably has restaurants in every county of the entire country, so from a software perspective, McDonalds point-of-sale system has to be capable of working with any obscure tax rates out there. Presumably, somewhere, there is a location that charges different tax rates for dining in than for take out. For nearly everybody, there is no difference, but they have to be able to accommodate for when it does happen.
‘Eat in tax’ versus ‘take out tax’ is just how they chose to display it. From a consumer perspective, there is a better way to show that…
March 8th, 2008 at 7:16 pm
Lazy Man,
That was nothing more than the “Fat Tax” you have proposed in another post.
March 9th, 2008 at 2:33 pm
Here in Ohio there is no sales tax for food, or I should say items considered food by the state government (blatant junk is Right Out). Part of the tax code is that if you pick up food from a restaurant and take it home, you are considered as doing the same thing as grocery shopping, so you owe no tax. But if you sit down in the restaurant and eat then you are considered as doing something non-essential to acquire food, so you owe an eat-in tax.
I don’t know if you have a similar system in California but it’s worth looking into.
March 10th, 2008 at 6:33 pm
it bothers me that they don’t let you know. I’m sure if they did that many people would not bother to stay.
Just think, when you goto to a nice place you Tip the workers, now when you goto a a cheap place you get to tip the company :S
March 11th, 2008 at 2:44 pm
You actually didn’t have to buy a drink, that was what was in the fine print. All you had to do was ask for a burrito and they should’ve given you one (at least, that was the rule in GA).
March 12th, 2008 at 6:00 am
Like Dana I live in Ohio and had the same thoughts. We have “eat in” tax. When I lived in Maryland ALL fast food and restaurant was considered junk food and taxed at the non-grocery rate. Only grocery store non-junk food was exempt from the sales tax. Also on the drive through food in Ohio the “pop” ( junk food) is always taxed. My receipts always show the drinks itemized and with a sales tax that only applies to them. Then places like DE have no sales tax at all. This is a function of where you choose to live.
Also as far as I know, you are always responsible for tax and tip on “free” food at restaurants. I dont see how complaining about your state’s sales tax policies has anything to do with the business that just collects the taxes.
March 14th, 2008 at 11:03 am
In some states the state sales tax is a ‘luxury tax’ and is not charged on items that are deemed by the state to be necessities. Food and clothing, for example, wouldn’t be subject to state sales tax. However, some items are always luxuries, such as dining in a restuarant (yes, even if it’s McDonald’s) and buying soda pop, so those items are taxed.
Depending on your state, getting food to go in a restaurant may or may not be considered a luxury. Some states seem to think it’s the same as buying groceries if you get your food to go and don’t tax you, but if you stay in the restaurant and eat, then it’s a luxury, and you have to pay tax.
If you live in one of those states, you’ll notice that the cashier always has to know if your food is ‘for here’ or ‘to go’ before they give you your order total.
March 26th, 2008 at 3:18 pm
You guys are dumb there is no such thing as a scam McDonalds is running to get “eat in tax” from its customers. It is just the tax (yes sales tax most places have it). It is a state tax not a McDonalds tax.
March 26th, 2008 at 4:14 pm
I’m sorry if I confused everyone. For what it’s worth, I did NOT get charged any tax, state or otherwise the previous day I ordered it. So if it is state tax, maybe McDonald’s made the mistake of not charging me it then.
April 25th, 2008 at 1:30 am
In Australia, it states on the menu board eat in and take out are different prices, not due to tax but because the staff have to clean up after people.
April 30th, 2008 at 2:15 pm
I just noticed for the first time a “take out tax” on my McDonald’s receipt (even though I ate in), and no sales tax. It was 11% of the food bill; food tax in AR is 5.5% and non-food tax is 8.5%, so at least in AR, that extra 5.5% is not just the state tax. Somebody else is dipping into our pockets, and who would be more likely than MaDonald’s. I think you’re on to something, Lazy Man.