Silicon Valley Is Not Happy About a Tax on Its Free Lunches

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By JP Mangalindan

For years, many tech workers in Silicon Valley have enjoyed free meals — one of several cushy perks offered the likes of Google, Facebook, and countless startups. But complimentary grub could become a thing of the past if the Internal Revenue Service has its way.

A report on Tuesday by the Wall Street Journal revealed the IRS is pushing to tax employees for their free meals. Companies would have to add in the value of free food when calculating employee tax withholding.

News of a potential tax on free meals has many worried in Silicon Valley, where all-you-can eat buffets are a basic recruiting tool. They’re also a subtle way to get employees to work longer hours by giving them no reason for them to leave the office except to sleep.

“Having food available or catered in is kind of expected of most tech firms, so this is a bit of a concern,” admits Steve Sarner, VP of Marketing, at the social networking site Tagged, where employees get at least one free meal a week cooked up by nearby restaurants in San Francisco’s Financial District.

Nathan Grady, a front-end engineer at Weebly, a service that lets users build web sites with custom software tools, called the idea of taxing free food awkward. The practice is a social catalyst that makes it easy for a company’s staff to talk to one another, he said. Weebly makes that easy enough by serving free catered lunch daily.

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