US Promotion Tax
Customers may apply certain promotions to orders made on the DoorDash platform. In accordance with applicable tax law, DoorDash’s tax calculation system considers these promotions and applies tax on menu items depending on whether the merchant is a restaurant or a non-restaurant, the jurisdiction in which the store is located, and the party that funds the promotion.
Tax calculation matrix
The matrices below indicate on which amount the subtotal tax is calculated. For example, if the matrix states “pre-discount,” then tax is calculated on the pre-discount price. This matrix applies to the subtotal for all orders, as well as the delivery fee and small order fee on Self-Delivery orders.
Definitions
Funding party
DoorDash: DoorDash pays for the cost of the promotion.
Merchant: Merchant pays for the cost of the promotion.
Third Party: A party other than DoorDash or the merchant pays for the cost of the promotion.
Examples
Some example promotion tax scenarios are outlined below for illustrative purposes. All of these examples are for restaurant merchants.
Example 1: DoorDash funds a promotion in California
Jurisdiction: California
Funding party: DoorDash
Tax treatment: DoorDash will collect tax from the customer and remit tax to the merchant based on the pre-discount subtotal price
Example 2: DoorDash funds a promotion in Texas
Jurisdiction: Texas
Funding party: DoorDash
Tax treatment: DoorDash will collect tax from the customer and remit tax to the merchant based on the post-discount subtotal price
Example 3: Merchant funds a promotion in California
Jurisdiction: California
Funding party: Merchant
Tax treatment: DoorDash will collect tax from the customer and remit tax to the merchant on the post-discount subtotal price
Example 4: Merchant funds a promotion in Texas
Jurisdiction: Texas
Funding party: Merchant
Tax treatment: DoorDash will collect tax from the customer and remit tax to the merchant based on the post-discount subtotal price
Example 5: A third-party funds a promotion in California
Jurisdiction: California
Funding party: Third-party
Tax treatment: DoorDash will collect tax from the customer and remit tax to the merchant based on the pre-discount subtotal price
Example 6: A third-party funds a promotion in Texas
Jurisdiction: Texas
Funding party: Third-party
Tax treatment: DoorDash will collect tax from the customer and remit tax to the merchant based on the post-discount subtotal price
Restaurant merchants
Promotion funding party:
Jurisdiction | DoorDash | Merchant | Third-Party |
|---|---|---|---|
Alaska | Pre-discount | Post-discount | Pre-discount |
Arizona | Pre-discount | Post-discount | Pre-discount |
California | Pre-discount | Post-discount | Pre-discount |
Delaware | Pre-discount | Post-discount | Pre-discount |
Louisiana | Pre-discount | Post-discount | Pre-discount |
Maryland | Pre-discount | Post-discount | Pre-discount |
Massachusetts | Post-discount | Post-discount | Post-discount |
Mississippi | Pre-discount | Post-discount | Pre-discount |
Missouri | Post-discount | Post-discount | Post-discount |
Montana | Pre-discount | Post-discount | Pre-discount |
New Hampshire | Pre-discount | Post-discount | Pre-discount |
New Jersey | Pre-discount | Post-discount | Pre-discount |
New York | Pre-discount | Post-discount | Pre-discount |
Oregon | Pre-discount | Post-discount | Pre-discount |
Tennessee | Pre-discount | Post-discount | Pre-discount |
Texas | Post-discount | Post-discount | Post-discount |
Utah | Pre-discount | Post-discount | Pre-discount |
Virginia | Pre-discount | Post-discount | Pre-discount |
Non-restaurant merchants
Promotion funding party
Jurisdiction | DoorDash | Merchant | |
|---|---|---|---|
Alaska | Pre-discount | Post-discount | Pre-discount |
Arizona | Pre-discount | Post-discount | Pre-discount |
California | Pre-discount | Post-discount | Pre-discount |
Delaware | Pre-discount | Post-discount | Pre-discount |
Louisiana | Pre-discount | Post-discount | Pre-discount |
Maryland | Pre-discount | Post-discount | Pre-discount |
Massachusetts | Pre-discount | Post-discount | Pre-discount |
Mississippi | Pre-discount | Post-discount | Pre-discount |
Missouri | Post-discount | Post-discount | Post-discount |
Montana | Pre-discount | Post-discount | Pre-discount |
New Hampshire | Pre-discount | Post-discount | Pre-discount |
New Jersey | Pre-discount | Post-discount | Pre-discount |
New York | Pre-discount | Post-discount | Pre-discount |
Oregon | Pre-discount | Post-discount | Pre-discount |
Tennessee | Pre-discount | Post-discount | Pre-discount |
Texas | Post-discount | Post-discount | Post-discount |
Virginia | Pre-discount | Post-discount | Pre-discount |
Reports
Detailed financial and promotion information for each order is available in the Transactions report. Check out How to Navigate the Merchant Portal to learn how to download Transactions reports.
Promotions funded by DoorDash
Discount field in transactions report
Before March 11, 2025: DoorDash funded subtotal discount amount | (for historical reference only)
March 11, 2025 and after: Customer discounts from marketing | (funded by DoorDash)
Pre-discounted subtotal passed to the merchant: SUBTOTAL
Tax passed to the merchant: Subtotal tax passed to merchant
Promotions funded by merchant
Discount field in transactions report
Before March 11, 2025: Merchant funded subtotal discount amount | (for historical reference only)
March 11, 2025 and after: Customer discounts from marketing | (funded by you)
Post-discounted subtotal passed to the merchant: SUBTOTAL
Tax passed to the merchant: Subtotal tax passed to merchant
Promotions funded funded by a Third-party
Discount field in transactions report
March 11, 2025 and after: Customer Discounts from Marketing | (Funded by a Third-party)
Pre-discounted subtotal passed to the merchant: SUBTOTAL
Tax passed to the merchant: Subtotal tax passed to merchant
Frequently asked questions
How are co-funded promotions taxed?
A co-funded promotion is a promotion where DoorDash, the merchant, and/or a third-party split the cost of the promotion offered to the customer.
Co-funded promotions are treated like two separate promotions for tax purposes. For example, if a $10 promotion is offered to a customer and the promotion cost is split equally between DoorDash and the merchant, the tax is calculated as if two separate promotions were used – one $5 promotion funded by DoorDash and one $5 promotion funded by the merchant.
What if I am located in Canada?
If you are located in Canada, check out the Canada Promotion Tax article.
Still have questions?
If you have any questions, please submit a help ticket on the Merchant Portal.
