Legal Question in Tax Law in Illinois

Gratuity taxed?

Is it legal to tax gratuity that is figured in on the sale/service of a banquet event (i.e. wedding reception, class reunion).

Asked on 10/21/03, 5:29 pm

1 Answer from Attorneys

John Pembroke John J. Pembroke & Associates LLC
0 users found helpful
0 attorneys agreed

Re: Gratuity taxed?

I'm not sure which tax you are asking about. The sales tax on the banquet should be limited to a tax on the restaurant's charges for food and beverage, not service, whether the gratuity is added into the total or handled separately for cash.

If you are asking about payroll taxes on gratuities for private parties, as opposed to regular restaurant meals, there is a FICA and other payroll taxes on gratuities, regardless of what the underlying event is.

Our comments are based on treating your question as a hypothetical. Accordingly, our comments could be substantially and materially different were we advised of all of the relevant facts and circumstances. Our comments are by necessity general in nature, and should not be relied upon in taking or forgoing action in your circumstances without retaining an attorney. In order to fully explore your legal matter, you should meet with us or another attorney and bring to any such meeting all relevant documents and correspondence, and any other relevant facts.

We are not hired to be your attorney, and no attorney-client relationship exists between us, unless and until you enter into a written retainer agreement with us, tender the agreed amount for a retainer and it is accepted by us. We reserve the right to decline representation should circumstances change.

As you are aware, in Illinois there are various deadlines for filing a complaint, filing an answer to a complaint, or taking other action in order to preserve your legal rights, and avoid a complete loss of those rights. You should retain counsel immediately in order to be fully advised of your rights, and to be fully informed of the applicable time period within which those rights must be asserted. If you were to delay in doing so, it might result in your potential cause of action being forever barred.

Read more
Answered on 10/21/03, 6:27 pm

Related Questions & Answers

More Tax and Taxation Law questions and answers in Illinois

Looking for something else?

Get Free Legal Advice

88953 active attorneys ready to answer your legal questions today.

Tax and Taxation Law Legal Forms

Browse and download our attorney-prepared and up-to-date legal forms from $4.99

Find a Legal Form

Featured Attorneys

Anthony SmithLawSmithLee's Summit, MO
Barry SteinDe Cardenas, Freixas, Stein & ZacharyMiami, FL
Timothy McCormickLibris Solutions - Dispute Resolution ServicesSan Francisco, CA
Find An Attorney

Are you an Attorney?

Earn additional revenue and grow your business. Join LawGuru Now