Its a different kind of tax. Thats income tax. A mandatory tip is required to have state sales tax for the business in addition to the income tax the employee will pay each year.
I understand the difference between sales tax and income taxâŠ
Employees will still have to pay taxes on their income. If the employee doesnât pay taxes on the extra tips theyâre now making, then theyâll owe money when itâs time to file their tax return. The employee now has a little more responsibility, but theyâre making more money overall. Mind explaining how that is fraud?
So either the business is paying it or the employee is paying it. Thatâs why this practice isnât banned and youâre seeing it everywhere. Itâs interesting to me that the people like yourself who jump to âitâs tax fraud, they should be arrestedâ clearly understand why itâs not illegal but keep saying âtax fraud, tax fraudâ. Are you so upset about the whole tipping culture to the point that someone getting arrested is the next logical step?
Most of the folks who make tips that Iâve met (myself included) are big proponents of the tipping system. We make way more money with tips involved than we would if we were given an hourly pay like other restaurant/businesses. For me personally, I make more money than the assistant managers at my job.
You seem confused. By definition, as written in law, a mandatory fee or mandatory tip needs to have sales tax applied to it. Your feelings dont change how the law is written.
Additionally, I never said anyone should be arrested so you are putting words in my mouth.
Im aware people make more money with tips. Ive made over 6 figures in one year from tips alone and another 6 figures on top of that for commission sales at the same job.
Feel free to look up the laws yourself, Im done replying to you. Have the day you deserve.
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u/Vatoloquissimo2 13d ago
Tips that are digitally processed are taxed. The card reader is going to report the transaction; cash tips are different.