Hey, I just met you, and this is Lazy... get these fast finance fixes and mail me, maybe?

McDonald’s Eat-In Tax

Written by

McDonalds Eat-In Tax.gifLast 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.]

Posted on March 7, 2008.

This post deals with: ... and focuses on:


Don't forget to these five minute financial fixes to save thousands!

38 Responses to “McDonald’s Eat-In Tax”

  1. Traciatim says:

    Are they allowed calling it a tax if it isn’t charged by the government? Do all restaurants charge that in the area?

  2. 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.

  3. Jonathan says:

    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 :)

  4. shawna says:

    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.

  5. WealthBoy says:

    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.

  6. EA says:

    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.

  7. Moneymonk says:

    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

  8. girl150 says:

    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.

  9. AJ says:

    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.

  10. Ryuko says:

    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)

  11. 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 :)

  12. girlrobot says:

    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!

  13. Jay says:

    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.

  14. Amanda says:

    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.

  15. Odnal says:

    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…

  16. Ron says:

    Lazy Man,

    That was nothing more than the “Fat Tax” you have proposed in another post. :)

  17. Dana says:

    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.

  18. Elliott Russell says:

    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

  19. brittdreams says:

    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).

  20. Greg C. says:

    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.

  21. NatalieMac says:

    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.

  22. Joy says:

    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.

  23. Lazy Man says:

    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.

  24. Laura says:

    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.

  25. david sizemore says:

    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.

  26. John P says:

    I went to McDonalds this morning and only ordered coffee through the drive through. They charged me tax even though according to CA law if its a hot beverage like coffee then its exempt from sales tax. Starbucks does not charge tax if you order a coffee. McDonalds is unjustly charging people tax.

  27. Vicki M says:

    In NH there is no sales tax. I noticed it to. But you get taxed either way. It doesn’t matter if you eat in or take-out, it is still taxed. I asked about it at the drive-through, of course they couldn’t explain it, unless I wanted to go in and talk to a manager. When you go to a restaurant here you pay a meal tax. So if that is it what it is why don’t they just call it a meal tax? Strange!!!

  28. joe says:

    I live in Ohio, we get charged eat-in tax if you order to stay. If you order to go, you dont get charged tax. I went to TacoBell and got chaged take out tax the other day. its all confusing to me.

  29. fordsuperchick says:

    I found out today (the hard way) that they are now also charging a “Take Out Tax”. I did not go through the driver thru but ordered something to take with me after I dined in.

    What is up with this?

  30. Jimmy says:

    There is a Take-out tax in state of connecticut….its getting ridiculous….

  31. Barb says:

    I don’t eat at Mc Donald’s since they charge a take out tax and an eat in tax. No other fast food restraunt charges those taxes in our state.

  32. Jennifer says:

    Here’s the scoop on the CA “hot food” tax, if you are really interested. It is a state tax law that if an establishment serves hot food, then it must charge a sales tax. There is the option to “opt out” of this tax if the food item is “to-go”, but the establishment must petition the State Board of Equalization to do so. This is found in Regulation 1603, Section E, located here:


  33. James says:

    I went to other fast food places and they do not have the same tax. So if your told it is required by law, they are full of nuggets! Jack does not charge for the same food like the clown.

  34. Beka says:

    No, i went to McDonalds today, and they have both an Eat in tax AND a Take out tax! i ate with a friend of mine and her daughter in the play place, and my boyfriend called from work asking to bring him some. both reciepts has this “tax”. and if it matters, i live in Kansas. i see some people are mentioning it’s because you’re in CA.

    it’s some BS.

  35. Lisa says:

    I was at a McDonald’s in Park Falls, WI on 01/01/2011. My brother ordered breakfast to dine in and was charged an “eat-in” tax. I ordered breakfast to go and was not charged an extra tax.

  36. BJ says:

    In Ohio you are NOT charged tax on any drive-thru or “to-go” orders. You are taxed on all eat-in orders. My company owns restaurants in Ohio and other states. We think this difference is nuts and this is a huge pain when programming but I guarantee that no company (even McD’s) is profiting off this. Unless the owners want to pay huge fines or go to jail once they get an audit.

    • Lazy Man says:

      I’m with you BJ. I was at a PinkBerry the other day and the sales lady actually recommended that I ask for it to-go to save on the eat-in tax.

      The difference is nuts at a lot of places, I agree. I don’t really care if a company is profiting or not off of it, a very minor change on my part can save me money.

Leave a Reply

Your email address will not be published. Required fields are marked *

Previous: RSS Feed Problems
Next: Weekend Links – Things Aren’t Always What They Seem Edition
Also from Lazy Man and Money
Lazy Man and Health | MLM Myth | Health MLM Scam | MonaVie Scam | Protandim Scams | How To Fix | How To Car | How To Computer