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No Such Thing As a Tax-Free Lunch At Google?

timothy posted 1 year,11 days | from the nothing-but-beans-and-rice-your-honor dept.

Google 631

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.'"

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631 comments

slow news day? (3, Insightful)

schneidafunk (795759) | 1 year,11 days | (#43400679)

On the otherside, an employer or contractor can 'expense' their meals if it's business related. However, I believe there is a percentage cap, based on overall income.

Re:slow news day? (1)

Anonymous Coward | 1 year,11 days | (#43400819)

This is most certainly not eligible as business related, just as regular commutes to work are not eligible for tax deductions.

Re:slow news day? (0)

Anonymous Coward | 1 year,11 days | (#43401009)

Why not? Google gets all their employees sitting in one place socializing and discussing work or project ideas. If people just go out to lunch there is no reason to think they would go with other employees.

Re:slow news day? (0)

Anonymous Coward | 1 year,11 days | (#43400901)

slow news day?

No, just more of the ongoing smear campaign.

Re:slow news day? (0)

Anonymous Coward | 1 year,11 days | (#43401075)

You can't expense meals that aren't part of doing business... that is... courting or keeping business with others. Two employees of the same company getting together for lunch isn't expens-able. Contractors can deduct meals when traveling, or any meal where business is being conducted, but even then there are IRS restrictions on location, suitability of the venue etc.

Re:slow news day? (0)

Anonymous Coward | 1 year,11 days | (#43401191)

You should tell... everywhere I've ever worked about this. I have yet to be employed at a place where business lunches are deducted daily, for decades, without even an eye batting. I thought it was the norm.

Re:slow news day? (5, Insightful)

AlphaWolf_HK (692722) | 1 year,11 days | (#43401141)

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?

We've found it! (1)

Anonymous Coward | 1 year,11 days | (#43400699)

The missing trillions in corporate tax evasion! Maybe they should setup the catering company overseas and get a *contract* at GoogleKitchen?

No you don't. (5, Insightful)

FooAtWFU (699187) | 1 year,11 days | (#43400715)

"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?

Re:No you don't. (0)

Anonymous Coward | 1 year,11 days | (#43400831)

It's not as if the Feds are going to lower anyone else's taxes if Google employees start paying taxes on their lunch benefit.

Re:No you don't. (0)

Anonymous Coward | 1 year,11 days | (#43401007)

That would also be pretty stupid with a trillion dollar deficit.

Re:No you don't. (1, Insightful)

dr2chase (653338) | 1 year,11 days | (#43401085)

Unless deficit spending were a good idea, and right now, it is.

Re:No you don't. (-1)

Anonymous Coward | 1 year,11 days | (#43401265)

Blame Regan... He started the insanity

Re:No you don't. (5, Insightful)

mwvdlee (775178) | 1 year,11 days | (#43400837)

Actually, since that Prof. McMahon is a Prof. at some U, his salary is paid from taxes. It's HIS lunches that are paid by tax dollars.

Re:No you don't. (2, Insightful)

asylumx (881307) | 1 year,11 days | (#43401021)

You say that as if you believe he doesn't earn his income. Following that logic every dollar in your wallet, at one point, came directly from the government. You're as much a gov't leach as he is.

Re:No you don't. (0)

Anonymous Coward | 1 year,11 days | (#43401203)

He only has bitcoins in his wallet, you insensitive clod!

Re:No you don't. (0)

Anonymous Coward | 1 year,11 days | (#43401249)

You say that as if you believe he doesn't earn his income.

Ever try to reach a professor for help?

Re:No you don't. (2, Insightful)

Anonymous Coward | 1 year,11 days | (#43401277)

You say that as if you believe he doesn't earn his income.

He's a professor of tax law, which in my book says he's little more than a witch doctor but with fewer scruples. When push comes to shove, he'll be on the same ship as the telephone sanitizers.

Re:No you don't. (5, Insightful)

SuperBanana (662181) | 1 year,11 days | (#43401133)

his salary is paid from taxes. It's HIS lunches that are paid by tax dollars.

NO, the WORK he does for the University is paid for by tax dollars. He then chooses to spend them on lunch. His lunches are "paid from" his work effort.

If his lunches were "paid by tax dollars", that would mean he was eating for free. He's not.

Re:No you don't. (5, Insightful)

BitZtream (692029) | 1 year,11 days | (#43400841)

And he doesn't support those 'free meals' for Google, Google does. Its not like the IRS is paying the bill for Google.

He's just a whining bitch.

Re:No you don't. (1, Insightful)

Anonymous Coward | 1 year,11 days | (#43401049)

When one payer dodges taxes, it raises rates for everyone else so the government can have the same amount of revenue. The professor is making a fair point.

Re:No you don't. (0)

Anonymous Coward | 1 year,11 days | (#43401155)

When one payer dodges taxes, it raises rates for everyone else so the government can have the same amount of revenue. The professor is making a fair point.

So how is this dodging taxes, again? I must've missed that part...

Re:No you don't. (0)

Anonymous Coward | 1 year,11 days | (#43401293)

Google employees are getting a benefit (free lunch/dinner) that isn't being taxed like normal income.

Re:No you don't. (0)

Anonymous Coward | 1 year,11 days | (#43401227)

When one payer dodges taxes, it raises rates for everyone else so the government can have the same amount of revenue.

Citation needed. When has such a rate increase ever happened?
If this were true, then our tax rates should go down if and when Google employees start paying taxes on their lunch benefit. Right?

Re:No you don't. (3, Insightful)

SwashbucklingCowboy (727629) | 1 year,11 days | (#43400867)

Google is undoubtedly considering free meals as a business expense and thus it's paying lower taxes (or in Google's case, getting more money back from the government) by providing free meals. So yeah, he - and I - and you - are helping to pay for those free meals.

Re:No you don't. (0)

Anonymous Coward | 1 year,11 days | (#43400961)

So because other people have less money stolen from then by the government, somehow that's coming out of your pocket? I love the self-righteous sense of entitlement in our country.

Re:No you don't. (0)

Anonymous Coward | 1 year,11 days | (#43401059)

No doubt you're a businessowner and you feel entitled to the lion's share of the fruits of your underlings' labour.

Re:No you don't. (0)

Anonymous Coward | 1 year,11 days | (#43401079)

So because other people have less money stolen from then by the government, somehow that's coming out of your pocket?

Hey, it's the same thing the rich say about those dirty 47% who don't pay income taxes. Clearly every one of them is on some sort of government welfare and using them more than me on my private roads, private fire & police, private military to keep bases around the world, etc.

Re:No you don't. (0)

Anonymous Coward | 1 year,11 days | (#43401303)

which is why we need to move to a flat tax and/or minimum payment requirement of $1.

Re:No you don't. (0)

Anonymous Coward | 1 year,11 days | (#43401197)

Because the government is now taking $X million dollars out of (n - 1) pockets instead of n, so each person ends up paying more. ‘Stolen’, right. Highways and missiles and Medicare pay for themselves, do they?

Re:No you don't. (1)

CQDX (2720013) | 1 year,11 days | (#43401027)

And many (most?) of Google's services are free to the average computer user. So who's the leech?

Re:No you don't. (1)

Anonymous Coward | 1 year,11 days | (#43401295)

Google's services are free to the average computer user. So who's the leech?

Leech? Would you call a pig on a pig farm a leech for getting free food? The users are Google's product, not it's customers

Re:No you don't. (1)

EnderDom (1934586) | 1 year,11 days | (#43401031)

By this logic you're also paying for google's power, air conditioning maintenance, photo copiers and anything else the company considers a requirement to pay for in order to maintain there business. By this logic tax payers are paying for your chair at work, your heating, the IT guy to clear the porn off your computer when you eventually leave.

Re:No you don't. (1)

dywolf (2673597) | 1 year,11 days | (#43401199)

no, we're not. business expenses dont work like that for companies, and not on that large a scale.
the rules fro business expenses are quite stringent and clear cut. if that sort of thing could qualify, all goods and services would be dramatically cheaper because EVERYTHING is a business expense, and they would be writing EVERYTHING off.
doesnt work like that.

Re:No you don't. (5, Insightful)

SJHillman (1966756) | 1 year,11 days | (#43400939)

It's the RIAA model applied to taxes. If someone is getting something for free, it must be coming out of my pocket.

Re:No you don't. (1)

DerekLyons (302214) | 1 year,11 days | (#43401217)

No, it's the same "sour grapes" political/fiscal theory that drives so many tax debates - "my taxes are high as hell, and that means the other guy isn't carrying his weight".

Re:No you don't. (1)

dywolf (2673597) | 1 year,11 days | (#43401135)

His tax money isnt paying for the lunches; Google's customers are.
How is this guy teaching tax law if he doesnt even understand basic taxes or business sense?

Re:No you don't. (4, Funny)

Richy_T (111409) | 1 year,11 days | (#43401261)

Dude, it's not Google's money, it's all the government's money. Google should be grateful for being allowed to use it.

(Add sarcasm tags as needed)

Re:No you don't. (1)

Anonymous Coward | 1 year,11 days | (#43401219)

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 implication is that they are illegally not paying taxes.

And when someone doesn't pay taxes required by law, then yes, they are robbing all law-abiding taxpayers.

Re:No you don't. (1)

Aaron H (2820425) | 1 year,11 days | (#43401285)

I agree. Just because someone is not paying the taxes on their lunch does not mean the taxes are not being paid. Pretty sure the IRS would probably take a rather big issue if an employee as large as Google was dodging taxes on their revenues.

Re:No you don't. (0)

Anonymous Coward | 1 year,11 days | (#43401305)

Ok, nice logic here. Next on my agenda then is to get my employer to pay my mortgage, car payment, grocery bill, and all utilities. I'm such a nice guy, I'll even let them decrease my gross pay to cover it. Now answer me this, where is that lost tax revenue gonna be made up?

Big deal (1)

Rich0 (548339) | 1 year,11 days | (#43400727)

So, I can't imagine that most Google employees are eating TWO meals a day there - maybe a meal and a snack. So, the benefit is probably $2500/yr or so.

And that is gross income. Even if their marginal rate is 35% they'd only pay an extra $800 in actual taxes on that.

If you gave me a choice of paying for typical cafeteria fare at a typical fortune 500 at typical rates for cafeteria food (ie mediocre food at premium prices), or paying an extra $800 in taxes so that I could have gourmet food at lunch every day (just grab whatever you want and stop by for ice cream in the afternoon if you have a craving), I think I'd take the gourmet food. I pay way more than $800/yr on lunches already most likely, and I don't eat like they do at Google.

A cheese steak, drink, and mushy fries at work costs me $7.50. Gourmet food for $3.50/meal in taxes - sign me up! Oh, and if your marginal rate is lower then it is even cheaper.

Re:Big deal (2)

symes (835608) | 1 year,11 days | (#43400787)

There is a cost that you are not measuring - I was fortunate enough to work somewhere where we also had some quite awesome food freely available at lunch time. Maybe not to Google standards, but it really was plentiful, fresh and very nice. Needless to say I then spent a small fortune on gym membership to bring my weight back down to almost normal levels.

Now I'm hungry again, dammit

Re:Big deal (2)

Colonel Korn (1258968) | 1 year,11 days | (#43400801)

So, I can't imagine that most Google employees are eating TWO meals a day there - maybe a meal and a snack. So, the benefit is probably $2500/yr or so.

And that is gross income. Even if their marginal rate is 35% they'd only pay an extra $800 in actual taxes on that.

If you gave me a choice of paying for typical cafeteria fare at a typical fortune 500 at typical rates for cafeteria food (ie mediocre food at premium prices), or paying an extra $800 in taxes so that I could have gourmet food at lunch every day (just grab whatever you want and stop by for ice cream in the afternoon if you have a craving), I think I'd take the gourmet food. I pay way more than $800/yr on lunches already most likely, and I don't eat like they do at Google.

A cheese steak, drink, and mushy fries at work costs me $7.50. Gourmet food for $3.50/meal in taxes - sign me up! Oh, and if your marginal rate is lower then it is even cheaper.

From my experience two meals a day seems reasonable. It's not particularly good, mind you - it's comparable to an average college dining hall - but it's free and convenient. It's also free and convenient for local homeless people, who seem to get into some of the cafeterias by being clean and walking through the door with a purpose. Last time I was in a Google cafeteria, at least, they were taking full advantage of the lack of authentication (and so was I).

Re:Big deal (0)

Anonymous Coward | 1 year,11 days | (#43401313)

This is a deliberate and unspoken policy of Google. Yes, those in need - as long as they are clean, behave themselves (you know, dont scream at and/or flick boogers/feces at other diners) are welcome.

Since when was Google Tax Supported? (2)

emeraldd (1609773) | 1 year,11 days | (#43400733)

WTF?!?

"And I have to pay taxes to support free meals for those Google employees."

I don't think this guy knows what he's talking about ....

Re:Since when was Google Tax Supported? (2)

Nerdfest (867930) | 1 year,11 days | (#43400767)

Google is directly paying the salaries for the employees preparing the food, as well as the raw food components and any related taxes. If the US finally has free public health care to some degree, the healthy food they provide probably saves on medical expenses as well. I can see it being taxable, but to nowhere near the 'full' value.

Re:Since when was Google Tax Supported? (0)

Anonymous Coward | 1 year,11 days | (#43401025)

Ah, I see you posted this comment yourself, when you could have paid someone else to post for you. Fire up the imputed tax!

Re:Since when was Google Tax Supported? (0)

Anonymous Coward | 1 year,11 days | (#43400795)

I dont' think he's saying Google is tax supported. Actually, I know he's not. What he's saying is that any time there is a tax break, the tax payers are in essence supporting the tax break. If you give college students tax breaks, then non-college students are subsidizing college students. And that's probably fine.

What I don't understand is where is Google's tax break? Google theoretically pays normal market price (and taxes) for the food and the income of the food preparers, so there's no hidden tax break as far as I can see.

Re:Since when was Google Tax Supported? (1)

Minwee (522556) | 1 year,11 days | (#43400979)

In Professor McMahon's perfect world, Google would pay extra salary to each of their employees, who would be taxed on that as income, and they would then use that money to buy food, paying sales tax. By giving people food instead of money Google is skipping both taxes.

Assuming a marginal tax rate of 20%, plus an extra 10% in sales tax, those $10 meals would generate $3 in taxes. For two meals a day, with a working year of up to 250 days, that's $1500 per year in potential taxes which aren't being collected for each and every Oompa-loompa at the Chocolate Factory. It would really be less than that because of the way that sales tax works, but since we're making up numbers anyway why bother being accurate?

Either that or the good Professor has been spending too much time listening to fringe political parties, honestly believes that anything he doesn't like must come from the government and involve stealing tax money from him and sees any attempt to provide decent food (not including three litre Big Gulps) to people who need it as the ultimate evil of Socialismidia. Considering the country involved, I would accept either possible explanation.

Re:Since when was Google Tax Supported? (2)

SQLGuru (980662) | 1 year,11 days | (#43401109)

Don't forget the extra payroll tax and the extra SSI / FICA.

At some point, I'm going to trace $1,000 through the system to see how many hands it has to pass through for the government to have claimed at least $900 of it. (I'll assume a starting point of it being part of an average worker's salary.) Income tax takes a chunk, sales tax takes a chunk, the business counts some of it as income (which is taxes) and they pay their supplier who takes some of it as income, etc. I wouldn't be surprised if the government had most of it with just a couple of parties handling the money.

Re:Since when was Google Tax Supported? (2)

ADRA (37398) | 1 year,11 days | (#43401283)

I am 100% positive that Google will write of their entire perks program as an operating expense which is opposed to taxable earnings, hence its a tax break (though only the % of their tax rate's portion of the program).

What is missed as a taxible function would also be the value added to the food costs from aquisition, preperation, and service of said food, unless of course restaurant food isn't taxed on a state/national level.

Re:Since when was Google Tax Supported? (0)

Anonymous Coward | 1 year,11 days | (#43400835)

If you give tax leniency to one group guess who covers the deficit? He was probably stretching it a bit but he has a point.

Re:Since when was Google Tax Supported? (0)

Anonymous Coward | 1 year,11 days | (#43400927)

He is saying that these Google employees are effectively taking advantage of undeclared income, and therefore not paying taxes on it. ( including social security) In turn this makes everyone's tax burden higher because fewer people are paying into the system. Obviously he's saying this is a net effect, not an actual cause.
Would you be ok with a company Google was giving everyone free cars and not having to pay any taxes for it?
Sure there are "company cars" but those are still owned by the company and have their own rules for their use.
Food can't remain company property be "returned" to the company when you leave. ( Well at least not in any form that would have.. er... value )

Re:Since when was Google Tax Supported? (1)

HaZardman27 (1521119) | 1 year,11 days | (#43401233)

( Well at least not in any form that would have.. er... value )

Unless your employer produces fertilizer!

WTF? (0)

Anonymous Coward | 1 year,11 days | (#43400735)

So, if lunch is taxable, does that mean free coffee is taxable? Free snacks? Free water?

I couldn't read the article. Does Google get a tax break for feeding it's workers or does it pay full price for the food it gives to them? Where is the lost tax revenue?

Hey, I have to pay to use the bathroom in some places, maybe we should tax bathroom breaks?

Or, better yet, let's just tax breaks in general, because all the people who work too much are subsidizing those lazy bastards who take breaks!

Re:WTF? (1)

SJHillman (1966756) | 1 year,11 days | (#43400995)

Work breaks are already subsidized in the form of giving government workers a paycheck. You don't think those guys actually do anything, do you?

Cost to prepare/serve versus prevailing cost? (2)

TWX (665546) | 1 year,11 days | (#43400775)

Wouldn't it be just as valid to say that this is provided as a service to enable Google employees to avoid going home to cook their own lunch or to avoid having to eat a less-desirable cold bagged-lunch, keeping them more productive at work?

I bring my lunch 80% of the time. When I buy my lunch I don't like spending more than $5, sometimes upwards of $7 if I don't have a lot of choice in the matter. When I bring my lunch it probably costs $1.

If Google has hired on-staff the food prep staff, it'd be more analogous to how school lunches cost, which is to say that an adult lunch in this school system for faculty is about $4.00. If Google doesn't generally allow just anyone to eat in their lunchrooms, then I don't see how they can be held to a full retail standard.

Jealousy of Google perks, nothing more (4, Insightful)

BitZtream (692029) | 1 year,11 days | (#43400777)

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.

Re:Jealousy of Google perks, nothing more (2)

SJHillman (1966756) | 1 year,11 days | (#43401039)

There was a big to-do with a local bagel chain a couple years ago when it came to taxes. If they hand you a bagel and cream cheese, no tax because it's a food item. However, if they take the 20 seconds to slice the bagel and smear the cream cheese on it, then there's an 8% tax because now it's a "prepared food item". The bagel chain hadn't been charging that 8% extra for those 20 seconds of work.

Re:Jealousy of Google perks, nothing more (2)

ADRA (37398) | 1 year,11 days | (#43401129)

Yes, that's by definition what a benefit is. If I lived in Google-ville where the company paid for every single service of my daily needs and officially paid me half the wages I'd normally receive, you expect the gov to look the other way and say "meh"? Its not even a tax grab, its simply fair exchange. If the company gives you anything of value, that's taxible. New computer? Taxible. Corporate Jet for personal matters? Taxible. Most companies still stretch the bounds of what are considered perks vs work functions like cell phones, corporate cars, personal internet access, etc..

I had a very generous health/dental package from one of my old companies which I practically never used, and was taxed a very large amount at the end of the year for the benefit. So what did I do? I reduced the package to the bare minimum to save on the tax.

Re:Jealousy of Google perks, nothing more (0)

Anonymous Coward | 1 year,11 days | (#43401255)

Your wife cooks your meals? Have some personal responsibility.

Actually, no, you should be shot, hanged, drawn and quartered.

Re:Jealousy of Google perks, nothing more (1)

x24 (81159) | 1 year,11 days | (#43401307)

The confusion here is income tax vs sales tax. The following is based on New York state tax law, but may be applicable here:

If (using your example) you buy ingredients at the supermarket and your wife makes the meal, there is no sales tax because unprepared food is not taxed.
If you buy a prepared meal at a restaurant, you pay sales tax.
If your employer gives you a free lunch, you don't pay sales tax on that, but you must report it as income on tax day, just like your salary. If you ate 50 meals that year, with an approximate value of $10 each, you would need to report $500 of income.

Here in Canada ... (5, Informative)

DavidClarkeHR (2769805) | 1 year,11 days | (#43400811)

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?

Re:Here in Canada ... (0)

Anonymous Coward | 1 year,11 days | (#43401113)

In the US, too, but here the government gets to pick and choose which companies to tax their fringe benefits.

Re:Here in Canada ... (1)

SJHillman (1966756) | 1 year,11 days | (#43401125)

Taxes are typically a percentage, what are you taking a percentage of? The cost the of the food? Cost of labor? Cost of maintaining the cafeteria? Average market price of a certain dish?

Are you saying that I should have to pay tax on using the employee gym where I work too? What about the computer they have set up for employees' personal use?

Government is like the Mafia (1)

geoffrobinson (109879) | 1 year,11 days | (#43400817)

The government is very much like the mafia. They don't really care what you are doing most of the time. They just want their cut.

But hey, we pay all these taxes by providing jobs for the food vendors and salaries, etc.

That's nice. Pay me.

Re:Government is like the Mafia (0)

Anonymous Coward | 1 year,11 days | (#43401123)

How do you regard drug prohibition?

Tax funded lunches? (2)

The Faywood Assassin (542375) | 1 year,11 days | (#43400827)

"'I buy my lunch with after-tax dollars,' said McMahon. 'And I have to pay taxes to support free meals for those Google employees.'"

How exactly do tax dollars go to fund the lunches at Google's cafeterias? Last time I checked, that money came from revenue earned by Google, through its business. You know, from working.

How would the government prove that a given employee is actually eating the meals? Do they have a swipe card that tracks them? What if they are bringing their own lunch?

Re:Tax funded lunches? (3, Informative)

Anonymous Coward | 1 year,11 days | (#43400997)

The argument is that because Google employers are not buying their lunch, then they're not contributing to the city/county/state tax revenue pool.

"Huh?" you say.

If Google's kitchens sold those lunches to the employees then the employees would pay tax on the purchase of those lunches.
Thus by not requiring people to purchase the food and thus pay tax on the purchase, they're depriving the city/county/state of sales tax.

From an IRS perspective, Google is effectively providing people a "fringe benefit." The benefit here is food. The food costs Google some amount of money to provide or prepare so it obviously isn't worth nothing. Thus the IRS is within its rights to argue that Google is providing people with a "fringe benefit."

Re:Tax funded lunches? (1)

SJHillman (1966756) | 1 year,11 days | (#43401153)

It's the government. Who cares about tracking employee meals when you can just tax potential meals? They'll come up with some formula like dividing the number of hours worked per week by four, multiplying that by the average cost of the most expensive dish on the menu at the local five star hotel and then adding 10% to account for rounding errors.

Same as free parking (2)

smooth wombat (796938) | 1 year,11 days | (#43400833)

Technically, if you get free parking from your employee (i.e. you don't pay to park at a parking garage because they pay for the spot), that is considered a taxable event. You are supposed to report that on your taxes.

This would be a similar event. You are benefiting by your employer covering the cost.

Whether the final ruling on this matter is considered the same remains to be seen.

Re:Same as free parking (2)

Culture20 (968837) | 1 year,11 days | (#43401269)

Technically, if you get free parking from your employe[r] (i.e. you don't pay to park at a parking garage because they pay for the spot), that is considered a taxable event. You are supposed to report that on your taxes.

That is quite dumb. My employer also provides me with free water, electricity, heating, cooling, shelter from rain, several computers with which I do my work, etc. And I don't pay taxes on any of it. No one does because everyone gets these sorts of things from their employer including parking space unless you work in Manhattan or Chicago. Now if they gave me a parking space I could use when not working, I could see how that might be a benefit.

yes, let's tax free work lunches (3, Insightful)

Anonymous Coward | 1 year,11 days | (#43400847)

... and while we're at it let's tax free coffee, free snacks, hell even all that free water workers drink on break.

Even better, let's tax all time spent on break -- I'm sick of supporting lazy workers on break with my hard-earned-no-break hours!

Does the professor also pay for the water he uses? (4, Insightful)

phayes (202222) | 1 year,11 days | (#43400865)

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??

Re:Does the professor also pay for the water he us (1)

Anonymous Coward | 1 year,11 days | (#43401127)

That’s a good analogy, but then why do I pay taxes for my benefits, like my pension plan?

Imagine a person A with a salary of $100k, and person B with a salary of $50k and benefits worth $50k (free meals at work, rent assistance, company car, airline tickets for personal use). Why should A pay more taxes than B?

No, because water is taxed...sigh (2)

SuperBanana (662181) | 1 year,11 days | (#43401247)

The university, unless it uses well water, pays for its water like everyone else via the water taxes.

By the way: $10 of water is an ENORMOUS amount of water. $10 barely gets you a nice cheeseburger or salad in many US cities. Typical US household water bill is $330/year, according to a quick search.

Re:Does the professor also pay for the water he us (-1)

Anonymous Coward | 1 year,11 days | (#43401259)

How is that "insightful"?

If Google paid each employee an extra $4k a year, that's taxable, yet because they pay in food it's not.

I can see the argument for that. Why can't you?

Quit attacking the source and look at what he's saying.

Why would you pay taxes on $5000? (0)

Anonymous Coward | 1 year,11 days | (#43400891)

Assuming google employees eat two meals at work and they are working 50 weeks a year, 5 days a week, that's $10 a meal. Even steak doesn't cost that much, especially in bulk. The only taxable item is the food itself, which I humbly suggest costs $2 a plate in bulk.

You don't tax for running the cafeteria or paying the employees (well, other than the taxes those employees already pay). If you did, you'd have to pay tax for each time the mail department stuffed letters in your mailbox (yeah, I'm old, deal with it). You pay taxes on the goods you get to consume. So, we're talking more like taxes on $1,000, which sounds like a much better deal.

Re:Why would you pay taxes on $5000? (1)

alen (225700) | 1 year,11 days | (#43400947)

RTFA
it says google uses grass fed beef which my wife buys at $7 a pound. good guess is that the rest of the ingredients are organic or similar quality. add in labor and the other costs of running a cafateria and $10 per meal is a good estimate

Re:Why would you pay taxes on $5000? (1)

SQLGuru (980662) | 1 year,11 days | (#43401193)

But you aren't buying from a supplier and in bulk. How much of that $7/lb does the grocery story pay their supplier and how much pays the stocker and how much is profit? I'm sure Google is paying a lot less than $7/lb for quality beef.

Maybe they should tax their free broadband at work (1)

CQDX (2720013) | 1 year,11 days | (#43400955)

as well as any other "freebies" that Google provides to its onsite employees. Just think how much revenue the state could get if each Google employee's computer and office furniture were taxed at regular income tax rates!

"I have to pay taxes to support free meals" (2)

Culture20 (968837) | 1 year,11 days | (#43400959)

I have to pay taxes to support free meals for those Google employees

Only in the most roundabout way. It's not like they're getting state funded lunches, they're just not paying a tax. Just like I don't pay a tax when I eat some raspberries that grew on my land. Of course the commissaries at Google probably pay a tax on the foodstuffs when they buy the bulk ingredients.

Re:"I have to pay taxes to support free meals" (2)

Culture20 (968837) | 1 year,11 days | (#43401065)

And before anyone complains that picking berries isn't the same as serving a free meal: You don't pay taxes when your mom heats up a hot pocket and brings it to the basement either.

Re:"I have to pay taxes to support free meals" (1)

asylumx (881307) | 1 year,11 days | (#43401105)

Of course the commissaries at Google probably pay a tax on the foodstuffs when they buy the bulk ingredients.

That's the same thing I was thinking. Not sure why this guy thinks taxpayers are paying for google employee lunches.

Re:"I have to pay taxes to support free meals" (1)

runeghost (2509522) | 1 year,11 days | (#43401195)

Of course the commissaries at Google probably pay a tax on the foodstuffs when they buy the bulk ingredients.

That's the same thing I was thinking. Not sure why this guy thinks taxpayers are paying for google employee lunches.

The restaurant I buy my lunch from also pays taxes on their ingredients. That doesn't mean I get to use a tax-exempt part of my salary to buy lunches with.

$5000 a year in TAXES for that food? NO WAY (0)

Anonymous Coward | 1 year,11 days | (#43400991)

That's about what me and the wife spend at the grocery store for 3 meals a day for both of us all year! (We spend about $90~$110/week, and that's not always all food.) Assuming 33% tax, 2 meals 5 days a week, try $396 in taxes per person per year. And yes I've eaten at the Mountain View Googleplex which is just down the street.

Good! (0)

Anonymous Coward | 1 year,11 days | (#43401029)

Ask the restaurant owners going out of business on the north side of Mountain View what they thing of free food at Google.
   

Re:Good! (1)

CQDX (2720013) | 1 year,11 days | (#43401139)

You forgot the sarc tag. The economy is what is killing restaurants. Fewer people have the disposable cash to eat out. If anyone does, it likely a Google employee taking his/her family out for dinner, spending the money he saved from lunch!

Missing taxes are still paid (1)

asylumx (881307) | 1 year,11 days | (#43401083)

I'm pretty sure the transaction between google and whoever is preparing the meals is still getting taxed. The only difference is that google is paying the bill and not the individual who gets the food.

I bet Prof McMahon's home page (1)

Anonymous Coward | 1 year,11 days | (#43401093)

will start turning up topmost for searches for "senile buffoon"

Absurd (0)

Anonymous Coward | 1 year,11 days | (#43401103)

This guy is a tax-law Professor, so this can't be brushed aside as a mistake, so when he says 'And I have to pay taxes to support free meals for those Google employees.' he is deliberately misleading.

The meals he is referring to aren't free (Google is paying for them) and they certainly aren't paid for by the government, so his taxes aren't supporting them one cent.

Tax is the government taking money off people (generally) against their will. If this Professor saw a mugger taking money off people in the park, would he claim that those lucky enough not to get mugged were being supported by those that were being mugged?

It's absurd.

Another symptom of pro-corporate bias in America (0)

runeghost (2509522) | 1 year,11 days | (#43401107)

Professor McMahon seems to be wrong - he's not actually paying for the Google employees' lunches - but I am glad to see this issue getting brought up. Letting employees of big corporations skate around taxes by providing non-salary benefits is wrong on several levels. First is the blatant unfairness: why do Google employees get tax-free lunches when, someone else (say, for example, me) has to pay for my lunch with post-tax income. Also, I don't think we want to encourage people to become even more dependent on their corporate masters.

Pretty common in other countries. (1)

Anonymous Coward | 1 year,11 days | (#43401147)

Here in The Netherlands, I'm pretty sure your boss can't just give you "free lunch" as that would be considered "payment in kind" and it would have to be added to your income.

There's a natural tendency for employers to try to pay their employees in something other than money. As an employee, you are interested in your net income, i.e., if an employer can figure out a way to pay you something tax-free, they can save on taxes while keeping your net income equal. So an employer might think "What do my employees buy with their salary, and can we simply buy it for them instead, thus paying less tax?" Here come the company cars, the company computer, etc. I understand that the government has to put *some* rules in place - after all, what about a "company house"?

Here in the UK... (1)

stepdown (1352479) | 1 year,11 days | (#43401159)

In the UK food served in company cafeterias is generally tax exempt, as long as the cafeteria is open to all employees. It's usually where management get their own "premium" menu that their benefit would be considered taxable.

As far as food in general, anything considered non-essential is usually subject to VAT (Value Added Tax [wikipedia.org]) which is our equivalent of US Sales Tax. This leads to arguments as to what is or isn't essential, with the recent Pasty tax [wikipedia.org] being a good example.

"Cost the government"? Don't think so. (3, Interesting)

RogueWarrior65 (678876) | 1 year,11 days | (#43401207)

I'm so sick of the expression "cost the government". It's a weasel expression intended to convince people that all money belongs to the government first and they let you have some only after they've spent whatever they want. Bulldinky. Every day you hear about how things have gotten too expensive. Food? Too expensive. Coffee? Too expensive. Air travel? Too expensive. Higher education? Too expensive. Gasoline? Too expensive. Electricity? Too expensive. Insurance? Too expensive. Rent? Too damn high. Healthcare? Too expensive. Why the hell isn't government too expensive? IMHO, if the government got rid of baseline budgeting and actually reduced expenses across the board, those of us who pay for all that crap might not be hell bent on looking for every write-off under the sun.

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