Business

Silicon Valley companies' free employee meals could be taxed

Monday, April 08, 2013

As the saying goes, there's no such thing as a free lunch. Many Silicon Valley workers who are used to enjoying the meal perk are suddenly feeling the heat from the IRS.

It is the kind of perk that gives accountants indigestion but is typical in employee cafeterias like the one at Plug and Play Tech Center in Sunnyvale. It offers plenty of healthy lunch choices free of charge for employees.

CEO Saeed Amidi describes free or heavily subsidized lunches as another cost of business.

"I look at it as a way to save time, be more productive, more collaborative," he said.

But should that food be taxed as income?

Dave Koehler would know. He's an accountant with many high tech clients who receive the perk. The question is, what's fair?

"That is the challenging part? It's not fair to me if I don't work at a large company," Koehler said.

The numbers add up -- if an employee spent $10 a day of his own money for lunch, that's $5,000 per year already taxed money. Multiply that by the thousands of employees, that's millions of dollars in uncollected revenue.

And so the debate. Entitlement? Perk? A part of doing business?

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Tags:
silicon valley, IRS, food, taxes, business, wayne freedman
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