With all the suspended deductions and taxability of fringe benefits going on in the wake of the “Tax Cuts and Jobs Act,” what about free snacks and Cokes that you provide for employees and guests?



Idaho Bible College and Seminary (IBCS) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(i) [as a church].  They are not required to file Form 990 annually.

IBCS has a “hospitality room” in the Administration Building where unlimited snacks (chips, nuts, cookies, etc.) and canned drinks are available to employees and visitors.  IBCS’ Controller calls us to ask if there are tax implications to providing these refreshments.  “Well,” she says, “if they are going to tax parking spots, we figure they might be trying to tax Mountain Dews too.”

We laugh.  “Good point, but not yet, anyway.  However, you raise another issue and that is the fact that meals provided to employees for the convenience of the employer are only 50% deductible through 2025 because Congress eliminated I.R.C. Section 274(n)(2)(B).  But, in a recent tax advice memorandum (TAM), the IRS held that the value of snacks furnished to employees was excludable as a de minimis fringe benefit under IRC Sec. 132(e)(1).”



From I.R.C. Section 132(e)(2):

The operation by an employer of any eating facility for employees shall be treated as a de minimis fringe if—

(A) such facility is located on or near the business premises of the employer, and

(B) revenue derived from such facility normally equals or exceeds the direct operating costs of such facility.

From Treas. Reg. 1.132-6(a) “De minimis fringe”:

In general. Gross income does not include the value of a de minimis fringe provided to an employee. The term “de minimis fringe” means any property or service the value of which is (after taking into account the frequency with which similar fringes are provided by the employer to the employer’s employees) so small as to make accounting for it unreasonable or administratively impracticable.

From Treas. Reg. 1.132-6(e)(1):

Examples of de minimis fringe benefits are occasional typing of personal letters by a company secretary; occasional personal use of an employer’s copying machine, provided that the employer exercises sufficient control and imposes significant restrictions on the personal use of the machine so that at least 85 percent of the use of the machine is for business purposes; occasional cocktail parties, group meals, or picnics for employees and their guests; traditional birthday or holiday gifts of property (not cash) with a low fair market value; occasional theater or sporting event tickets; coffee, doughnuts, and soft drinks; local telephone calls; and flowers, fruit, books, or similar property provided to employees under special circumstances (e.g., on account of illness, outstanding performance, or family crisis). [Underline added.]



  • Although the IRS appears bent on keeping the “Parking Tax,” there is currently not a “Snacks Tax” in the Code and Regulations whereby you would pay a tax on refreshments provided to employees – but…
  • In a recent TAM, the IRS deemed that meals provided free of charge to employees and guests were not for the “convenience of the employer” – even though there were stated safety concerns at issue.
  • Snacks or refreshments provided to your employees are generally not taxable to those workers if they meet the criteria to be considered “de minimis fringe benefits” under I.R.C. Section 132(e)(1).
  • For tax years 2018 through 2025, for-profit employers can deduct only 50% of the cost of operating a qualified eating facility (different from de minimis fringe). After 2025, no deduction is allowed.

Specific questions? Email Dave Moja

The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.

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