Quote:
Originally Posted by retiredguy123
I agree, but do the math. If a restaurant has $1,000,000 in gross sales and receives 15 percent of it in tips, that is $150,000. So, if they program their receipt machine to incorrectly collect a 7 percent sales tax on the tip income, they will be overpaying their sales tax bill to the state by $10,500. I cannot imagine that many restaurants would be foolish enough to do that.
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I thought the question was about how the suggested tip was calculated.
If my purchases total $100 I would be charged $7 in tax for a total of $107. Is the suggested 20% tip calculated to be:
- $20 because it is based on the pre-tax amount?
- $21.40 because it is based on the post-tax amount?
I have seen both.
Note: Neither of those affect the amount of tax paid to the State (and County). That amount is calculated on the $100 sales total regardless of how the machine calculates the suggested tip.
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