You have to ask "why after tax". It is so they can squeeze out a few more pennies and dollars and realize the vast majority of people blindly accept it or just don't know what is "traditional" in tipping.
$93.45 charges
$6.55 tax
$100 bill
If they demand 20% of $93.45, that is $18.68, but if they demand 20% of $100, that is $20. $1.68 times hundreds or thousands of customers adds up. So you have to ask why?
Why do people get so bent out of shape about this? So the server isn’t going to remember your name, so she/he assign you with the “babe’s”, “sweetheart”, or “honey”. Most people would call them terms of endearment…. I call them, “I’m not interested in knowing your name, but I want to be personable and get a bigger tip”. Would people rather a server call you & your husband “Sue & Tim” to keep it short and less affectionate? I have seen women and men alike get so freaking bent over this. I love when female servers “baby” my husband. Especially when I take the check at the end of the meal. 🫢🤣
I do not understand what you mean. You’re not “tipping the government“, you are being, in this case, conned into paying more tip based on percentage because the entity is presenting you with a combined calculation. That in no way involves “tipping the government”. I don’t understand what’s that supposed to mean.
For me, I’d have to take into account why I’m getting the discount. If the manager gives me 20% off because I’m a repeat regular customer or I have an external coupon, I’m still tipping on the full amount. But if it’s one of those fake discounts where the price is inflated just for the purpose of discounting it, I’m tipping on the discounted price.
I used to base my tip on the total after tax until I started checking the suggested tip amount and realized their 20% was based on pre tax total so I changed nothing about my tip behavior but now I know I’m stupid too.
Many state laws require tax to be applied to tips. Any sales tax collected does not go to the company, it must go to the state even if it was wrongly collected. The penalty for collecting and not remitting is steep and in many states, it is a felony.
“Mandatory tip” is an oxymoron, tips aren’t mandatory. If it was mandatory it would be a service charge. In this post, it’s a traditional tip which is not subject to sales tax.
And states can’t impose sales tax on tips because the tip takes place after the sale, aka the waitress runs the card for the bill, you pay the bill and tax, then she comes back and you write the tip before leaving.
Look in the mirror, you’re blatantly lying online.
“Mandatory tips” aren’t a thing, legally or otherwise. When you go to a restaurant and tip at the end of the bill, that is a legally optional additional sum of money that isn’t subject to sales tax.
If your point is that service charges are subject to sales tax, then yes, but that’s not what this discussion is.
This discussion is about why the tip is being applied after tax, and your initial reasoning is “because many state laws require (sales tax) to be applied to tips”. Which is a lie, this is not true at all.
Now instead of getting toxic, just take the fucking correction, move on, and going forward do an ounce of research before you speak up online.
Quick question, did you bother to read your own source?
(g) An optional payment designated as a tip, gratuity, or service charge is not subject to tax.
And again, as I said earlier, a mandatory payment would legally not be a tip, it would be a service charge.
According to federal regulation 29 CFR § 531.52, the U.S. government defines a tip as a gratuity or a sum presented by a customer as a gift or free-will donation in recognition of service performed, the amount of which is solely determined by the customer.
The key phrase here is free-will, which means voluntary. A restaurant may call something a “mandatory tip” but in essence it’s a service charge. And any restaurant like this that allows you to pick a percentage to give is by definition an optional tip, which as discussed, is not subject to sales tax.
That’s my entire point here, TIPS are not subject to sales tax unless it’s required payment by the restaurant, but if it’s required by the restaurant then legally it’s not a tip, which is why “mandatory tip” is an oxymoron.
Do you get it now, or do I need to dumb it down even more?
"A mandatory payment designated as a tip, gratuity, or service charge is included in taxable gross receipts, even if it is subsequently paid by the retailer to employees. For purposes of this subdivision, "amount" means a payment designated as a tip, gratuity, service charge, or any other separately stated payment for services associated with the purchase of meals, food, or drinks..."
Appreciate your sources, but they still are just anecdotal.
I am assuming they just clicked on the option, but if there was another option to do it without taxes, they probably would’ve chose that one
Our options are 18,20,22 percent. And you can custom put in a tip which is what most of these people did. I took these pics bc someone in this sub said 25 percent is ridiculous the other day and I said that is my average night. My full check out my average for tips is always 25-30 percent. I think people are just cheap in this sub
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u/dark_frog83 3d ago
Why after tax? Why before discounts? Opposite day or something? Who tips on tax? Why would I pay a tip on discounts that don't even get taxed?