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Silicon Valley companies are known to cater to their hard working employees. Free yoga classes, nap rooms and meals are among the perks their workers enjoy.
A recent Wall Street Journal report reveals that the Internal Revenue Service could be targeting these fringe benefits, more specifically "employer-provided meals" in the next fiscal year. In the agencys recently released Priority Guidance Plan for 2014 to 2015, the IRS states that the free meals will now be considered a taxable fringe benefit, the same way a company car or phone is.
Rather than taxing employees themselves an arduous if not impossible task to monitor the IRS said it would collect taxes from employers providing the free meals. According to the Wall Street Journal, if the measure is put into effect, a free meal at Google estimated at $8 to $10 for an employee that eats two meals a day at the office could cost the company an extra $4,000 to $5,000 a year in taxes. Software engineers at Silicon Valley companies like Google typically make a base salary of at least $128,000.
These perks on top of the generous salaries are now a fundamental part of Silicon Valley company culture, and expected by incoming employees. But they are not exclusively in the service of employee luxury: They encourage shorter breaks, longer hours spent at the office which may mean less opportunity for employees to spill company secrets off campus as well.
At the moment, the tax code views free meals provided by employers in two ways: if meals are treated as a regular payment for labor, they are taxable. If they are a necessary expense for an employee to do their job (like meals given to oil rig workers in the Gulf of Mexico) they are not taxable.
According to a post from the Tax Foundation, the IRS and the U.S. Treasury Department concluded that regularly provided free meals falls under the former category and therefore should be taxed. A new guidance on the enforcement will be issued, the agencies told the Journal, although there was no timeline on when that would be.
For bigger tech companies like Facebook, Twitter, Google and Apple, the added food tax may not be hard to cover. But for smaller startups, the new enforcement could be seen as a disadvantage in a space where they feel compelled to provide benefits like free personal training sessions, laundry and unlimited vacation days to attract new recruits.
Matt MacInnis, CEO of the digital publishing startup Inkling, told Forbes he would have to increase employees annual salaries by more than $5,000 to cover the added food taxes.
For the past four years he has provided free lunches to his employees.
It seems there would be pretty terrible, unintended consequences, MacInnis said referring to the extra compensation he would consider doling out to his employees if the tax comes into effect.
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IRS Plans To Tax Free Meals Silicon Valley Companies Dole Out
Web server administrators who wish to trim bandwidth costs and hasten the delivery of their Web pages should take a look at a newly updated free module from Google designed to automate a number of techniques used to compress content.
Simply installing the module, called PageSpeed, could cut bandwidth usage by a significant amount, noted Mano Marks, a member of the Google developer platform team, who posted a blog item announcing the module update Thursday.
PageSpeed, designed to analyze and optimize Website performance, works with both the Apache and Nginx Web server software. Google estimates that using a new feature of PageSpeed called Optimizing For Bandwidth could reduce bandwidth needed to convey a large Web site by about 37 percent.
Marks noted there are already a number of techniques commonly used to conserve bandwidth, such as compressing JavaScript scripts and Cascading Style Sheets (CSS) before they are sent out, or sizing images to a more appropriate resolution for a browser.
Such techniques can take work to automate though, and make debugging more difficult should something go awry.
PageSpeed does not require any additional work to run, once installed in the Web server software.
The technology is based on software that Google built for its Chrome browser, which the company found cut bandwidth usage by 50 percent. The software, however, only works for Chrome, and users must opt-in to use the technology. The software was also limited by its inability to work with traffic secured by Secure Socket Layer (SSL) encryption.
PageSpeed, in contrast, can work with any browser, and can work in both HTTP and HTTPS (Hypertext Transfer Protocol over Secure Socket Layer) mode. The software compresses and transcodes images in place, and minimizes JavaScript and CSS automatically.
PageSpeed has a number of additional techniques to further speed delivery of Web pages, such as deferring delivery of JavaScript or images until they are required. These advanced optimization techniques can be run by enabling them in the PageSpeed configuration file.
At this point, PageSpeed only works on Apache and Nginx, which collectively run about 57 percent of all the Web servers on the Internet, according to the most recent monthly Web survey from Netcraft.
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Google offers to accelerate Web servers with new software
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