I was just reading my latest copy of the Maryland Sales and Use Tax Bulletin and found out that we, the consumer, must now pay 6% sales tax on the mandatory gratuity charge in restaurants for parties of more than 10 people. This is going to be a nightmare for restaurants to calculate and report. Maybe in light of this, restaurants will choose to forgo the mandatory gratuity for large groups. Where does the taxation end in Maryland?

Wait, what? They're now charging the customer tax on the tip??

Wait, what? They're now charging the customer tax on the tip??

That is correct! But only if the tip is mandatory and only for parties of more than 10.

That is correct! But only if the tip is mandatory and only for parties of more than 10.

then the instantaneously tax it again as income for the waitress...

The ONLY way they can do this is if the restaurant does it, there's a paper trail for multiple taxes.


UFB

then the instantaneously tax it again as income for the waitress...

The ONLY way they can do this is if the restaurant does it, there's a paper trail for multiple taxes.


UFB

They tax it when you make it, spend it and then again to those that get that money. Quite a deal huh?

then the instantaneously tax it again as income for the waitress...

Exactly. How can they get away with that???






Oh. Duh. Nevermind.....

I was just reading my latest copy of the Maryland Sales and Use Tax Bulletin and found out that we, the consumer, must now pay 6% sales tax on the mandatory gratuity charge in restaurants for parties of more than 10 people. This is going to be a nightmare for restaurants to calculate and report. Maybe in light of this, restaurants will choose to forgo the mandatory gratuity for large groups. Where does the taxation end in Maryland?

It doesn't end until the last person leaves the state. Doubt there'd be a need to turn out the lights.

Its easy to fix that, instead of a party of 10, come in as two parties of 5.

Its easy to fix that, instead of a party of 10, come in as two parties of 5.

I was just thinking that myself... Come in get four tables close to each other, eat then pull your tables together...

similar 2 unearned income.

NOT if they are taxing YOUR money that you are giving as a tip, that you've already paid income tax on.

And if its a mandatory tip from the restaurant you'd be forced to claim it, or chance beating the papertrail.. kind of like not reporting cash tips v not reporting tips left on a credit card.

Don't go out to dinner. The foods fattening and loaded with salt. Do yourself a favor and cook at home.

Don't go out to dinner. The foods fattening and loaded with salt. Do yourself a favor and cook at home.

For how much I dislike the legislators for creating yet another tax - I've got a agree with this one, but to each his own.

edit: I'm hard pressed to find a restaurant out here that beats my wife's cookin':yum:

For how much I dislike the legislators for creating yet another tax - I've got a agree with this one, but to each his own.

edit: I'm hard pressed to find a restaurant out here that beats my wife's cookin':yum:
I like authentic cuisines that I don't know how, or have the ingredients to make. I don't have a clue how to cook a tandoori chicken, but I know a restaurant that does. (or sushi, mexican, afghan...)

They tax it when you make it, spend it and then again to those that get that money. Quite a deal huh?

nice summary... every transaction the state gets a cut (by state I include Uncle Sam)


I have had several conversations recently with small business owners who have complained bitterly that the state of Maryland makes it almost impossible to start and operate a successful business. The combination of taxes and regulations just smother small, independent businesses.
BTW, Calvert was listed as one of the worst in terms of over regulation, almost harrassment from the code enforcement operation.

nice summary... every transaction the state gets a cut (by state I include Uncle Sam)


I have had several conversations recently with small business owners who have complained bitterly that the state of Maryland makes it almost impossible to start and operate a successful business. The combination of taxes and regulations just smother small, independent businesses.
BTW, Calvert was listed as one of the worst in terms of over regulation, almost harrassment from the code enforcement operation.

Stop being such a code enforcement operator hater.

Don't go out to dinner. The foods fattening and loaded with salt. Do yourself a favor and cook at home.

I agree with Merlin99, I don't go out for fast food. I want a well prepared meal, I'm a pretty damn good cook, both taste and health, but there are some things I just can't do.
When I'm away from home, work or pleasure, I never eat at chain places. I'm looking for a good local spot that does authentic cuisine.
Besides, it's not a relaxing, romantic dinner if you have to cook and clean up.

Stop being such a code enforcement operator hater.

You ever dealt with these inspectors? Dealing with one individual can be hard enough, but getting two different people can drive you bonkers trying to figure out just exactly what it is they don't like.

Don't go out to dinner. The foods fattening and loaded with salt. Do yourself a favor and cook at home.

Great idea! Then we can put restaurants out of business and their numerous employees out of work and they can go on the dole like Obama wants them to.

:thewave:

You ever dealt with these inspectors? Dealing with one individual can be hard enough, but getting two different people can drive you bonkers trying to figure out just exactly what it is they don't like.

Sorry, just a slight attempt at humor.

My curiosity got the better of me on this one, so I did a little calculation. Look at 10 ppl going out to eat @ $20/person = $200 bill (not including taxes/tip yet)

Tax on top of tip: 200 + 19% tip = 238 + 6% tax = $252.28 total
Tax and tip separate: 6% tax on $200= $12; 19% tip on 200= $38, so total = $250.00

So, for you, the customer, the addtional cost is $2.28 - not a huge amount considering the entire bill/the income of a person able to foot said bill (or maybe my math's wrong)

I'd still rather give that extra $2.38 to the server as a tip though :\

My curiosity got the better of me on this one, so I did a little calculation. Look at 10 ppl going out to eat @ $20/person = $200 bill (not including taxes/tip yet)

Tax on top of tip: 200 + 19% tip = 238 + 6% tax = $252.28 total
Tax and tip separate: 6% tax on $200= $12; 19% tip on 200= $38, so total = $250.00

So, for you, the customer, the addtional cost is $2.28 - not a huge amount considering the entire bill/the income of a person able to foot said bill (or maybe my math's wrong)

I'd still rather give that extra $2.38 to the server as a tip though :\

Or, lets say that the 10 people are paying for their own, instead of the idea of one person footing the entire bill. The difference is now .238 per person. Big deal...... If .238 per person on a perty of 10 helps get the Maryland payrole met, or helps pay a teacher, fire fighter, or police officer, etc, etc.....then I dont have an issue with that.

Or, lets say that the 10 people are paying for their own, instead of the idea of one person footing the entire bill. The difference is now .238 per person. Big deal...... If .238 per person on a perty of 10 helps get the Maryland payrole met, or helps pay a teacher, fire fighter, or police officer, etc, etc.....then I dont have an issue with that.

Why don't we just tell the state the same thing we tell ourselves..

This is how much you get, no more.. Make your budget work..

Instead of EVERY time they can't pay for their projects because of THEIR mismanagemnt they hit us with a new tax..

FOR EXAMPLE..

Cell Phones for the entitlement class..

Fine and dandy when we had the budget and the revenue to support the program.. now that times are tight, instead of inventing new taxes, how about axing the cell phone program.

Cancel all of their contracts, and don't tax my tips..

There is nothing new about that Sales tax regulation. It has been there for many years. Many restaurants charge mandatory gratuity on tables of 6 or more. That then becomes a meal cost and the sales tax applies.

There is nothing new about that Sales tax regulation. It has been there for many years.

The way I read it from the update from the comptroller's office a couple of weeks ago, this tax on the gratuity is new. It was passed in the bill pertaining to the corkage fee that restaurants can now charge to open a bottle of wine you bring to the restaurant. Maybe same concept, new wording? :shrug:

The tax on a mandatory gratuity for parties of 10 or more has indeed been around for a while.....since '08 at least..perhaps longer.

The tax on a mandatory gratuity for parties of 10 or more has indeed been around for a while.....since '08 at least..perhaps longer.

the reg that I just read that I thought was new does state for parties of MORE than 10....