Tax Planning for Food Trucks and Mobile Food Businesses: Vehicle Depreciation, Commissary Costs, and Multi-Jurisdiction Sales Tax

By Yarik Yarosh, CPA ·September 5, 2026 ·Updated September 23, 2026 ·7 min read

Written by Yarik Yarosh, CPA (US & Canada) September 5, 2026 · FL CPA license AC61704 · CPA Ontario

Food trucks combine the tax advantages of a non-SSTB trade (full QBI deduction), a vehicle-based business (100% bonus depreciation on the truck), and a food service operation (COGS deduction for ingredients and supplies). The primary asset, the food truck itself, is a rolling commercial kitchen that depreciates as a vehicle (5-year MACRS, eligible for 100% bonus depreciation because it exceeds 6,000 lbs GVWR and isn’t a passenger vehicle). The kitchen equipment installed in the truck (griddles, deep fryers, refrigeration, ventilation hoods, fire suppression systems, POS terminals) is separately depreciable personal property, also eligible for Section 179 or bonus depreciation. This means that the entire upfront investment in a food truck business, from the chassis to the spatulas, is deductible in Year 1. The ongoing tax challenge is multi-jurisdiction sales tax: because food trucks are mobile, they must track where each sale occurs and remit sales tax to the correct jurisdiction.

✓Key takeaway

Food truck asset depreciation:

Asset	Typical Cost	MACRS Life	With Bonus
Truck chassis (step van, box truck)	$30,000-$60,000	5 years	Year 1 (100% bonus, > 6,000 lbs GVWR)
Kitchen buildout (custom fabrication)	$30,000-$80,000	5-7 years	Year 1
Generator	$3,000-$10,000	5 years	Year 1
Commercial griddle / grill	$2,000-$8,000	7 years	Year 1
Deep fryer	$1,000-$5,000	7 years	Year 1
Refrigeration (reach-in cooler/freezer)	$2,000-$8,000	7 years	Year 1
POS system (Square, Toast, Clover)	$500-$2,000	5 years	Year 1
Fire suppression system	$2,000-$5,000	7 years	Year 1
Wrap / graphics (exterior branding)	$2,000-$5,000	Deductible (advertising) or 15-year	Year 1 if advertising
Propane tanks and lines	$500-$2,000	7 years	Year 1

Food truck financial benchmarks:

Metric	Range
Average revenue per event/day	$500-$2,000
Food cost (COGS as % of revenue)	25-35%
Labor cost (% of revenue)	25-35% (owner + 1-2 employees)
Fuel and propane	5-8%
Commissary kitchen rent	$500-$2,000/month
Net profit margin	10-20% (owner-operated)

How should food truck operators minimize taxes?

Hypothetical example

Round numbers. A food truck operates 5 days per week, averaging $1,200 per day in revenue, for 48 weeks per year.

Revenue and COGS:

Item	Amount
Gross revenue ($1,200/day x 5 days x 48 weeks)	$288,000
Food cost (30% of revenue)	($86,400)
Disposables (cups, napkins, containers, utensils)	($8,000)
Gross profit	$193,600

Operating expenses:

Expense	Amount
Employee wages (1 part-time helper, $15/hr x 30 hrs x 48 wks)	($21,600)
Employer payroll taxes	($1,652)
Commissary kitchen rent	($12,000)
Fuel (truck)	($10,000)
Propane	($4,000)
Generator maintenance	($1,500)
Event fees / location fees	($6,000)
Insurance (commercial auto + GL + product liability)	($5,000)
Health department permits and inspections	($2,000)
Truck maintenance and repairs	($4,000)
POS processing fees (2.6% of revenue)	($7,488)
Marketing (social media, Yelp, food truck apps)	($3,000)
Cell phone (80% business)	($960)
Accounting and bookkeeping	($2,400)
Total operating expenses	($81,600)
Net income (before truck depreciation)	$112,000

Year 1 (truck purchase year):

Item	Amount
Food truck (fully built, used)	$90,000
100% bonus depreciation	$90,000
Net income after depreciation	$22,000
Tax on $22,000 (12% bracket, single)	$2,383

In Year 1, the food truck operator pays minimal tax because of the truck depreciation.

Year 2+ (steady state, no major equipment purchase):

Item	Schedule C	S-Corp
Net income	$112,000	$112,000
Owner salary	N/A	$50,000
SE tax	$15,826	N/A
Employer FICA	N/A	$3,825
Employee FICA	N/A	$3,825
Total payroll/SE tax	$15,826	$7,650
Savings		$8,176
QBI deduction (20% x $112,000, non-SSTB)	$22,400	$22,400
QBI tax savings (22%)	$4,928	$4,928
Total annual savings		$13,104

Multi-jurisdiction sales tax:

Challenge	Solution
Different rates in different cities	Track location of each sale; POS system with location-based tax calculation
Registration requirements	Register for sales tax in every jurisdiction where you regularly operate
Prepared food vs. grocery	Most states tax prepared food (served hot or with eating utensils); rate may differ from general merchandise
Catering events (private locations)	Tax based on delivery location, not home base
Farmers markets	Some states exempt farmers market sales; verify per state
Interstate operation (if food truck crosses state lines)	Register in each state; different rules per state

Example multi-jurisdiction situation:

Location	Revenue	Sales Tax Rate	Tax Collected
City A (downtown lunch)	$120,000	8.25%	$9,900
City B (evening events)	$80,000	7.50%	$6,000
County fairgrounds	$40,000	6.00%	$2,400
Private catering events	$48,000	8.25% (delivery location)	$3,960
Total	$288,000		$22,260

The food truck must file sales tax returns in each jurisdiction (monthly or quarterly depending on volume).

Commissary kitchen deductions:

Most health departments require food trucks to operate from a licensed commissary kitchen (for food prep, storage, cleaning, and waste disposal):

Expense	Amount	Deductible?
Commissary rent	$12,000/year	Yes
Commercial kitchen time (shared kitchen rental)	$5,000-$15,000/year	Yes
Food storage (refrigerated storage unit)	$2,400/year	Yes
Waste disposal (grease trap, trash, recycling)	$1,200/year	Yes

Expanding to a second truck or brick-and-mortar:

Expansion	Tax Consideration
Second food truck	Full bonus depreciation on new truck; additional sales tax jurisdictions
Brick-and-mortar restaurant	QIP for buildout (15-year, 100% bonus); different depreciation profile
Ghost kitchen / delivery-only	Lower buildout cost; still QIP eligible
Franchise the concept	Franchise fees are IRC 197 intangibles for franchisees; franchisor recognizes as ordinary income

Startup costs (IRC 195):

For a new food truck business:

Expense	Treatment
First $5,000 of startup costs	Deduct immediately (if total startup costs < $50K)
Remaining startup costs	Amortize over 15 years (180 months)
What qualifies	Market research, recipe development, location scouting, training (before opening)
What doesn’t qualify	Equipment purchases (depreciate, not startup)

Illustrative numbers only, not a real client and not advice for your facts.

Does taking a food truck into another state create nexus?

Crossing a state line to sell from the truck puts you physically in that state, and physical presence is judged apart from any sales threshold. Texas, for example, says you’re engaged in business there if you have a temporary or permanent location in Texas, an employee there to sell or deliver, or you own or use tangible personal property in the state.

A truck serving customers checks more than one of those boxes. The Texas guidance doesn’t give a minimum number of days, so don’t assume a short run of events is exempt. The remote seller thresholds matter less for a truck, since they’re built for sellers who aren’t in the state at all.

P.L. 86-272 won’t help with income tax either. It only covers soliciting orders that are filled by shipment from outside the state, and a truck sells on the spot.

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Cite this page

Yarik Yarosh, CPA. "Tax Planning for Food Trucks and Mobile Food Businesses: Vehicle Depreciation, Commissary Costs, and Multi-Jurisdiction Sales Tax." Blue Cloud CPA, September 5, 2026, updated September 23, 2026. https://bluecloudcpa.com/guides/small-business-tax-planning-food-truck-mobile-food-business-deductions

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.

Tax Planning for Food Trucks and Mobile Food Businesses: Vehicle Depreciation, Commissary Costs, and Multi-Jurisdiction Sales Tax

How should food truck operators minimize taxes?

Does taking a food truck into another state create nexus?

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