Did a little updating: the tax treatment of employee meals on-site is a bit different than other perks, with some changes since I took tax. They are in some circumstances not tax-deductible as a business expense by the employer or taxable to the employee, so the IRS gets its fill a different way where the employer is not exempt from income taxation. E.g., this discussion of a 2019 IRS technical advice memorandum or TAM (also this). So going back to your hypo, if that is the tax treatment in a particular situation, there may not be a tax advantage depending on whether the employer is a 501(c)(3).
Traditionally, coffee and doughnuts are excludable as de minimis fringe benefits, but as the first linked article explains the reason for that is that the value of each snack event is small and accounting for the benefit is impractical. I’m not sure that would hold for a barista-run coffee shop where the employer could scan the employee’s badge and track usage that way. A study of the 50-page TAM opining on one employer’s on-campus dining might help but doesn’t seem very high-value.
Sounds like they should have hired more baristas.
Did a little updating: the tax treatment of employee meals on-site is a bit different than other perks, with some changes since I took tax. They are in some circumstances not tax-deductible as a business expense by the employer or taxable to the employee, so the IRS gets its fill a different way where the employer is not exempt from income taxation. E.g., this discussion of a 2019 IRS technical advice memorandum or TAM (also this). So going back to your hypo, if that is the tax treatment in a particular situation, there may not be a tax advantage depending on whether the employer is a 501(c)(3).
Traditionally, coffee and doughnuts are excludable as de minimis fringe benefits, but as the first linked article explains the reason for that is that the value of each snack event is small and accounting for the benefit is impractical. I’m not sure that would hold for a barista-run coffee shop where the employer could scan the employee’s badge and track usage that way. A study of the 50-page TAM opining on one employer’s on-campus dining might help but doesn’t seem very high-value.