You serve birria from a 16-foot kitchen on wheels. You don't track Sales-and-Use tax across 5 counties. We register the right nexus, claim the FICA tip credit, write off the truck, and keep your COGS defensible.
Festival circuits, special events, brewery pop-ups, county fairs. Every state and every event location is a potential nexus point for income, sales, and meal tax. Most food trucks file federal and one state, miss the others, and lose sleep when a notice arrives.
Crossing into Georgia for a 3-day rib festival creates a temporary nexus. Most states require a transient vendor permit AND a non-resident income tax filing for net income earned there. We track event-by-event revenue by state and file the right forms so a single notice does not unravel the whole season.
P.L. 86-272 (does not protect food sales); state transient vendor statutesIf your staff reports tips on top of wages above the federal minimum, you can claim a non-refundable credit equal to the employer FICA tax (7.65%) on tips that exceed the minimum wage portion. Most food trucks miss this entirely. On $40,000 of reported tips it is usually $2K to $3K straight back as a credit on Form 8846.
IRC §45B(a); Form 8846; Rev. Rul. 2012-18A food truck built on a heavy-duty chassis above 6,000 lbs GVWR escapes the §280F luxury auto cap and qualifies for §179 plus 60% bonus depreciation in 2024. A $120K rig can be expensed almost entirely in year one. Trailer-style food units are even cleaner since they are not subject to §280F at all.
IRC §179; §168(k); §280F(d)(5)(A)IRS food service audits hammer COGS reconstruction. We set up daily food cost logs (vendor invoices, mid-month inventories, ingredient yield ratios) so cost of goods is reproducible if a notice arrives. Most owners overstate or understate COGS by 8 to 12% without realizing.
IRC §471; Treas. Reg. §1.471-2; Rev. Proc. 2002-28Reach-in coolers, fryolators, gas grills, generators, propane systems, POS hardware, and commissary build-outs all qualify for §179 up to $1,160,000 for 2024. Bonus depreciation on the overflow. We time purchases so the deduction lands in your highest-income year.
IRC §179(b); §168(k); Rev. Proc. 2023-34Single truck under $100K = Sch C is fine. Two or more trucks, $250K+ = S-Corp election usually saves 6-9K per year on SE tax. We benchmark reasonable comp against route manager wages so the wage holds up. Watson v. US set the precedent the IRS still leans on.
IRC §1402(a); Watson v. US 668 F.3d 1008 (8th Cir. 2012)Birria truck operator, S-Corp, $180K revenue 2024, worked 22 events across FL, GA, AL. Bought a new $120K truck mid-year and added a commissary lease. We segregated the truck into §179 + bonus, filed the FICA tip credit, and registered transient vendor permits in GA and AL to clear up multi-state exposure.
$14,000 savedFederal savings on §179 truck expense + §45B tip credit + cleaner reasonable comp. Plus multi-state exposure closed before it became a notice.