In this Article:

What is marketplace facilitator?

A marketplace facilitator is a platform, that connects buyers and sellers to help facilitate the sale of various goods and services.

Given the way marketplace facilitators are defined in certain states’ tax laws, ChowNow and other third-party providers like Uber Eats, DoorDash, and Grubhub may be classified as marketplace facilitators in certain cases.

How do marketplace laws impact tax?

In some jurisdictions, there are laws that change the party that is responsible for remitting tax on sales made between buyers and sellers on a marketplace facilitator’s platform. These laws shift the responsibility for tax remittance from merchants to ChowNow, as the marketplace facilitator.

As an example, for orders where ChowNow is classified as a marketplace facilitator under applicable laws, ChowNow is responsible for collecting and remitting tax to the appropriate taxing authority.

How do I know if marketplace facilitator laws affect my restaurant?

Information about marketplace facilitator laws can be found on most state Department of Revenue sites.

Is ChowNow classified as a marketplace facilitator?

ChowNow is classified as a marketplace facilitator for orders originating from eat.chownow.com and the ChowNow App in applicable jurisdictions.

Where is ChowNow classified as a marketplace facilitator?

ChowNow is registered to collect and remit state-administered sales tax on orders made through the platform in the following states:

What about transactions outside of eat.chownow.com and the ChowNow App?

Transactions through other ChowNow ordering platforms (such as Order Direct, Order Better Network, and Branded Mobile Apps) are not subject to marketplace facilitator laws. Tax collection and remittance for transactions completed outside of eat.chownow.com and the ChowNow App remain the responsibility of the restaurant.

For these orders placed outside of eat.chownow.com and the ChowNow App, the restaurant is responsible for:

  • The restaurant remains responsible for specifying the correct sales tax rate to be collected.
  • ChowNow will collect this specified tax amount and transfer it to the restaurant.
  • The restaurant is solely responsible for the subsequent remittance and filing of all these taxes.

How do the marketplace facilitator laws affect my payouts?

Merchant payouts will exclude any taxes that ChowNow collects and remits directly to tax authorities.

How can I view taxes collected and remitted by ChowNow on orders where ChowNow is classified as a marketplace facilitator?

To view ChowNow marketplace facilitator tax amounts, run an Accounting Data report from your ChowNow Dashboard.

If your location received orders where ChowNow is classified as a marketplace facilitator, a new column titled “MPF Tax Withholding” will appear. This column shows the total amount of tax withheld by Company for each applicable order.

Why do tax amounts for marketplace facilitator orders look different from other orders?

For marketplace facilitator orders only, the tax rates configured by you on the ChowNow Dashboard are not used to calculate tax amounts. Instead, ChowNow uses an automated system to assign applicable tax rates to items sold, which may differ from the tax rates configured by you.

Our automated system applies sales tax to delivery fees, gratuity, and any service charges, including the Support Local Fee, applicable to the order.  Note: Support Local Fee is excluded from Gross in Disbursement reports.

If you believe that ChowNow has incorrectly assigned tax rates to items sold on marketplace facilitator orders, please contact ChowNow Support for assistance.