Rules & Regulations of the State of Tennessee
Title 1320 - Revenue
Subtitle 1320-04 - Miscellaneous Tax Division
Chapter 1320-04-02 - Sales of Alcoholic Beverages for Consumption on the Premises
Section 1320-04-02-.07 - TIPS, GRATUITIES, AND SERVICE CHARGES
Universal Citation: TN Comp Rules and Regs 1320-04-02-.07
Current through September 24, 2024
(1) The term "tip" means a monetary gift or gratuity given by a customer to a server in a bar or restaurant or similar establishment. Tips are not normally includable in the sales price of alcoholic beverages sold.
(2)
(a) Tips
will, however, be included in the sales price of alcoholic beverages if the
tips are either mandatory on the part of the purchaser or if the tips are not
returned to the persons performing the service.
(b) A charge which is automatically added to
the customer's bill by the seller shall be considered mandatory, whether styled
by the seller as a tip, gratuity or otherwise. This presumption may be overcome
by an affirmative showing by the seller by a preponderance of the evidence that
the prevailing practice was that payment of such charge was not
required.
Authority: T.C.A. §§ 67-1-102, 67-6-402, 67-6-102, and Memphis Country Club v. Tidwell, 503 S.W.2d 919 (Tenn. 1973).
Disclaimer: These regulations may not be the most recent version. Tennessee may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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