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Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations


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T


550.0000 Taxable Sales of Food Products—Regulation 1603

Annotation 550.0760

(d) Tips, Service and Cover Charges


550.0760 Service Charges. A standard amount collected by a club from its members as a service charge is not a gratuity even though the charge is paid over to employees and is not used to offset their wages. The service charge, paid as an automatic obligation of the club members, is collected as an exaction and must be included in taxable gross receipts. 9/24/65.