Where a purchaser provides a gratuity for an employee of a seller, and the amount
of the gratuity is wholly in the discretion of the purchaser, the gratuity is not
subject to the tax imposed by this article, whether paid in cash to the employee or
added to the bill and charged to the purchaser's account, provided in the latter case,
the full amount of the gratuity is turned over to the employee by the seller.
No locality shall levy any tax under this section upon (i) that portion of the amount
paid by purchaser as a discretionary gratuity in addition to the sales price; (ii)
that portion of the amount paid by the purchaser as a mandatory gratuity or service
charge added by the restaurant in addition to the sales price, but only to the extent
that such mandatory gratuity or service charge does not exceed twenty (20) percent
of the sales price.
(Res. No. 13-07-2000, 7-18-00; Ord. of 8-15-06)
