Mandatory Gratuities and Service Charges

Payment of a separately stated mandatory gratuity or service charge, which is in the nature of a tip, is not subject to the tax if the food or beverages are served to a group of ten persons or less. However, mandatory gratuity or service charges on sales of food or beverages to a group of more than ten persons are taxable whether or not they are separately stated.

Coupons and menu club tickets that are in the nature of discounts are not a part of the taxable price; however, if the vendor can obtain reimbursement from a third party for the coupon or ticket, it is part of the sales price and, therefore, subject to the tax.