Rules & Regulations of the State of Tennessee
Title 1320 - Revenue
Subtitle 1320-05 - Sales and Use Tax Division
Chapter 1320-05-01 - State Sales and Use Tax Rules
Section 1320-05-01-.76 - TIPS, GRATUITIES AND SERVICE CHARGES
Universal Citation: TN Comp Rules and Regs 1320-05-01-.76
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 included in the sales price of food or beverages sold.
(2)
(a) Tips
will, however, be included in the sales price of food or 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, 67-6-102 and 67-6-402; 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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