Food and Taxes
You go to dinner with a large party, are charged a 20 percent gratuity and then a "gratuity tax" on top of that! What's the deal? San Francisco Chronicle food critic Michael Bauer dishes a quick answer:
According to IRS, once a gratuity is automatically added, it's considered a service charge that goes to the house, rather than a voluntary tip. When that's done, it becomes taxable. What you're seeing is the 8.5% tax that's added as a tax to the 20% tip.
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