Legal Question in Tax Law in California

Again Gratuity Tax

If I go into a restaurant and there is a 18% tip included ( that I did not order) I am also required to pay tax on that amount? Can you please explain why I am paying tax on something I did not order and why am I paying tax on a service, I thought you could not tax labor?


Asked on 3/20/06, 4:05 pm

1 Answer from Attorneys
Ken Koenen Koenen & Tokunaga, P.C.

Re: Again Gratuity Tax

If there is a service charge applied with the bill, it is subject to sales tax. If it is a voluntary tip, after receiving the bill, it is not taxable.

Please do not ask me to explain ... we are dealing with state government here.

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Answered on 3/20/06, 4:19 pm


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