Restaurant Sales Tax: Set It Up Right in Your POS

You’ve already poured your money, time, and probably your life savings into making your restaurant real. The last thing you want is to watch it all get eaten up by fines, surprise audits, or penalties… just because you didn’t set up your restaurant sales tax correctly. 

Not to mention the trust you could lose if your customers spot mistakes on their checks.

In this blog, we’ll explore how to set up different sales taxes for your restaurants across the country—and manage them easily on a single cloud dashboard.

Restaurant Sales Tax Varies by State (and Why It Matters)

Restaurant sales tax is a small percentage your restaurant charges your customers on top of the cost of their meal when they order and pay. But you don’t keep this money. Every month or quarter, depending on where you are, you hand it over to the tax authorities.

But what if you go wrong with restaurant sales tax and don’t collect enough? Sadly, you’ll still owe the difference. Out of your pocket. Therefore, guessing isn’t an option if you want to stay compliant and keep your restaurant profitable. 

So, is there sales tax on restaurant food in the U.S.? Well… yes. In restaurants, you almost always have to charge sales tax on food and drinks. Some states have different rules for alcohol or catering. But in most cases, if you’re handing someone prepared food, you’re collecting tax.

Sounds simple, right? Well… sort of. However, the real difficulty is how wildly the rates can change depending on where you operate. Unlike other countries with a single VAT or GST, the U.S. has no federal sales tax. Instead, the sales tax rate varies with the place. So, this difficulty becomes a pain point when you're not using a reliable POS system.

Restaurant Sales Tax 

So when you open your café, diner, or burger joint, you can’t just Google “average sales tax” and put it on your receipts. You have to know your exact state rate, plus any local or special meal taxes that apply to you. 

Miss it, and you could undercharge and owe thousands later or overcharge and end up refunding frustrated customers! 

Here are some examples to understand how sales tax works in the U.S.:

States with No Statewide Sales Tax

Oregon, Montana, and New Hampshire don’t collect statewide sales tax at all. But local options can still pop up. For example, parts of Montana have local “resort” or “tourist” taxes up to 3%–5% on prepared food.

New Hampshire doesn’t have a general sales tax. But it does have a 9% Meals and Rentals Tax on restaurants, hotels, and catering.

States with Special Meals Taxes

In Virginia, the base state sales tax is about 4.3%. But cities can add a hefty meals tax, sometimes up to 7%. In Richmond, for example, the combined tax for restaurant meals can reach 11.5%.

In Rhode Island, the base sales tax is 7%. All restaurant meals and beverages carry an additional 1% local meals and beverage tax. That makes your total restaurant tax 8%.

States with High Local Surtaxes

The state tax in Illinois is 6.25% on general goods. But food and drinks for immediate consumption are taxed higher. Plus, cities like Chicago add on a local restaurant tax. The result? A Chicago restaurant often collects around 10.75%–11.75%.

New York City’s base sales tax is 4%. But it adds a local rate plus a Metropolitan Commuter Transportation District (MCTD) surcharge. So, a NYC café or bistro usually collects around 8.875% total.

How to Set Up, Edit, or Remove Sales Tax in Your Restaurant POS

When your restaurant sales tax rates change, your restaurant POS has to be flexible. You should be able to add, edit, or remove tax rates in seconds. No spreadsheet hacks. No manual calculators. The clean, clear tax settings should match your city’s rules so that you don’t wake up to an audit letter down the road.

OneHubPOS makes this part easy: it lets you stack state and local taxes, label them clearly, and tweak them. The whole process is quick, clear, and designed for non-techy folks.

Here’s exactly what you do:

Step 1: Log In

Log in to OneHubPOS using your credentials: your username and password. Once you’re in, you’ll see your dashboard, with various types of quick reports and graphs. This is your command center for… well, everything from sales to staff. All in one spot.

Step 2: Choose Your Restaurant 

If you're managing multiple restaurants from a single dashboard of your QSR POS, go to the topmost drop-down icon slightly to the left and click it. You'll see a menu with the names of the places you're managing. Click on the restaurant for which you want to set up the sales tax. 

However, if you're not running many places or if your desired location is already chosen, no need to go through this step.

Step 3: Go to Settings

Click on the three-line icon to the left. You’ll see a menu with options like Dashboard, Reports, Employees, Menu, and Product Setup. Go all the way down. You’ll see Settings at the bottom. Click that. It’s where you manage restaurant tax rates, discounts, role-based access, and many more aspects of restaurant operations.

Step 4: Click Taxes

Inside your Settings, you'll see sections like Discount, Taxes, Modifiers, Tippings, Terminal, and so on. Click on Taxes to view your existing restaurant tax rates. If you’re just getting started, this list may be empty. 

Step 5: Add, Edit, or Remove

This is where you get to choose what you need to do:

Add a New Tax

1. Click Add Tax.
2. Give it a clear name, like “NYC Meals Tax” or “Illinois State Tax.”
3. Enter the exact percentage your city or state requires.
4. Click Save. Done!

Edit an Existing Tax

Always double-check your entered restaurant sales tax rate. So, in case you've entered incorrect rates or if tax laws change, update your POS immediately. It’s way cheaper than paying back taxes + penalties later.

1. Next to each tax in your list, you’ll see an Edit button.
2. Click it, update the name or percentage, then Save. 

Remove a Tax

Maybe your area drops a local meals tax or some other tax.

1. Find the tax in the list.
2. Click the bin icon, and confirm. Consequently, your POS stops applying that tax on future orders.

How It Works Once Sales Tax Is Set Up in Your POS

So what actually happens at the counter once you’ve set up your sales tax? Here’s how it flows:

1. Your guest places their order. Maybe a burger, fries, and a soda to go.
2. Your staff punch the order into your POS system.
3. Instantly, your POS calculates the correct sales tax for that transaction, based on your exact restaurant sales tax rates.
4. The customer’s POS receipt clearly shows the subtotal, the tax amount, and the final total. It’s all broken out so there’s no confusion.
5. The guest pays via cash, card, or contactless payment. Your POS automatically logs the sale, the tax, and updates your reports behind the scenes.
6. The tax portion is tracked separately in your daily sales reports. So when it’s time to file, you know exactly how much you’ve collected and exactly what you owe.

Handle Your Restaurant Sales Tax With OneHubPOS 

Ignoring tax paperwork is how a small mistake turns into a big, expensive problem. But now, you know:

• Your state’s rules aren’t the same as your neighbor’s. 
• Your city might have its own “bonus” tax just for restaurants. 
• Exactly how to set up, edit, or remove your restaurant sales tax in your all-in-one POS—no IT help needed.

So, restaurant sales tax isn’t scary when you’ve got the right system watching your back. OneHubPOS keeps it simple—with a clean dashboard, intuitive settings, and fast updates when your local tax rules change.

Ready to make restaurant sales tax one less thing to worry about? Book your OneHubPOS demo today and see how OneHubPOS helps restaurants like yours stay compliant, confident, and just focused on great service.