Legal Question in Tax Law in California
gratuity tax
Is is legal to be taxed on the gratuity for a wedding reception? I understand that I should be taxed on food and beverage, but should my 20% gratuity also be taxed?
Asked on 7/17/04, 3:56 pm
1 Answer from Attorneys
Ken Koenen
Koenen & Tokunaga, P.C.
Re: gratuity tax
Sorry, the state needs the money that they already spent.
If there is a mandatory "gratuity" that is will be added by a catering contract or other contract, the restaurant is required by the State Board of Equalization to tax that amount.
Only voluntary tips are exempt from sales tax.
Answered on 7/17/04, 4:46 pm