How does DoorDash calculate tax on promotions?
DoorDash calculates promotional tax based on applicable state and local tax laws. In general, tax treatment is determined by:
Whether you're a restaurant or non-restaurant merchant
The jurisdiction where your store is located
The funding party for the promotion
The tables below show whether tax is calculated on the pre-discount or post-discount subtotal. This applies to:
The order subtotal
Delivery fees and small order fees on Self-Delivery orders
Promotion definitions
Funding party: refers to who is paying for the promotion.
DoorDash: When the funding party is DoorDash, DoorDash pays for the promotion.
Merchant: When the funding party is the merchant, you pay for the promotion.
Third party: When the funding party is a third party, a party other than DoorDash or the merchant pays for the promotion.
Promotion type: refers to the different promotion structures.
Fixed amount: A set dollar amount (for example, "$10 off subtotal"). Even if the full amount isn't used, it's still treated as a fixed amount promotion.
Variable amount: A percentage or conditional discount (for example, "50% off" or "buy one, get one free"), even if the discount is capped.
How do different promotions affect tax calculation?
Tax treatment can vary by state, even for the same promotion type. These taxes are collected by DoorDash from the customer and remitted to the merchant based on either the post-discount or pre-discount subtotal.
For example:
DoorDash-funded promotions
California: Tax is calculated on the pre-discount subtotal
Texas: Tax is calculated on the post-discount subtotal
Merchant-funded promotions
California: Tax is calculated on the post-discount subtotal
Texas: Tax is calculated on the post-discount subtotal
Third-party-funded promotions
California: Tax is calculated on the pre-discount subtotal
Texas: Tax is calculated on the post-discount subtotal
These differences reflect how each jurisdiction treats discounts under local tax law.
How is tax for restaurant merchants calculated?
Use the table below to determine whether tax is calculated on the pre- or post-discount subtotal for restaurant orders.
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 |
How is tax for non-restaurant merchants calculated?
Use the table below to determine whether tax is calculated on the pre- or post-discount subtotal for non-restaurant orders.
Promotion funding party | |||
|---|---|---|---|
Jurisdiction | DoorDash | Merchant | Third-party |
Alaska | Post-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 |
Missouri | Post-discount | Post-discount | Pre-discount |
Montana | Pre-discount | Post-discount | Pre-discount |
New Hampshire | Post-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 | Post-discount | Post-discount | Pre-discount |
How are co-funded promotions taxed?
If a promotion is co-funded by multiple parties (for example, DoorDash and the merchant), it's treated as separate promotions for tax purposes.
For example:
A $10 promotion split evenly between DoorDash and the merchant is treated as:
One $5 DoorDash-funded promotion, and
One $5 merchant-funded promotion
Tax is calculated independently for each portion based on the funding party and jurisdiction.
Where can I find my promotion and tax details?
You can find detailed promotion and tax information in the Merchant Portal:
Log in to the Merchant Portal
Navigate in the left-hand menu to Payments.
Under Payments, select Transactions.
DoorDash-funded promotions
Discount field
Before 3/11 (for historical reference only): DoorDash funded subtotal discount amount
3/11 and after: Customer discounts from marketing (funded by DoorDash)
Subtotal passed to you: Pre-discount subtotal
Tax passed to you: Subtotal tax passed to the merchant
Fixed amount promotions: Tax on the pre-discount subtotal
Variable amount promotions: Tax on the post-discount subtotal
Merchant-funded promotions
Discount field
Before 3/11 (for historical reference only): Merchant-funded subtotal discount amount
3/11 and after: Customer discounts from marketing (funded by you)
Subtotal passed to you: Post-discount subtotal
Tax passed to you: Subtotal tax passed to merchant
Third-party-funded promotions
Discount field
3/11 and after: Customer discounts from marketing (funded by a third party)
Subtotal passed to you: Pre-discount subtotal
Tax passed to you: Subtotal tax passed to merchant
Fixed amount promotions: Tax on the pre-discount subtotal
Variable amount promotions: Tax on the post-discount subtotal
Are there location-specific considerations for Canada?
If your store is located in Canada, refer to the Canada Promotion Tax article for country-specific guidance.
If you have any questions, please contact Merchant Support.
