A popular workplace benefit is at risk as President Trump’s latest tax legislation, signed on July 4, eliminates a long-standing business deduction for employer-provided food, effective January 1.
The change, tucked into the nearly 1,000-page “Big Beautiful Bill,” ends tax breaks for office snacks, coffee, and on-site lunches, a perk rooted in Silicon Valley’s dot-com era and now common across industries.
The move, initially proposed by Trump’s 2017 tax law, which halved the deduction, is projected to generate $32 billion in additional taxes on employers through 2034, according to the Joint Committee on Taxation.
While the new law rolled back many year-end tax increases, it preserved the food deduction’s expiration, except for exemptions for Alaska’s fishing industry — secured with Sen. Lisa Murkowski’s (R-AK) support — and restaurants, a nod to kitchen staff traditions. Maine’s lobstermen, however, saw no relief, as Sen. Susan Collins (R-ME) opposed the bill.
The impact remains uncertain.
Goldman Sachs, known for $30 meal stipends and stocked pantries, and Meta, famous for free food access, declined to comment on their future plans. Google, another leader in on-site dining, did not respond to inquiries.
Surveys from the Society for Human Resource Management show that 44% of U.S. employers now offer free snacks — double the rate from a decade ago, which is celebrated for boosting morale and collaboration.
Google co-founder Sergey Brin once mandated that food be available within 200 feet of every employee. Ali Sabeti, CEO of ZeroCater Inc., a San Francisco catering firm serving major banks and tech companies, remains optimistic.
“It’s pretty inelastic,” he said, per Bloomberg. “When you take a tax deduction away, the cost is going to go up, but companies will continue to spend, just like if you took away a deduction on a laptop.” His business weathered the 2017 deduction cut without losing clients.
Factories and hospitals, which also provide subsidized meals, will feel the pinch, unlike restaurants.