Restaurant Surcharges Taxable in California

Monday, February 6th, 2017

 
 
Diners in a restaurant.
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California recently released a special notice about tax on restaurant surcharges.

Some restaurants add a surcharge to customers' bills to cover required employer costs. These costs may include employee wages, healthcare contributions, and paid sick leave.

This surcharge is taxable. California taxes sales of prepared food. Sales tax applies to the total selling price, including the surcharge. As a result, restaurants must collect tax on these surcharges. They cannot deduct the amount of the surcharges on their sales and use tax returns.

http://www.boe.ca.gov/pdf/l491.pdf


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

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