- The Colorado Department of Revenue issued a letter discussing the sales tax on tips in dining establishments.
- Colorado imposes a sales tax on the amount paid for food or drink served in dining establishments.
- Tips received by employees are generally not subject to sales tax.
- However, if the establishment includes a mandatory service charge or adds a gratuity to the bill, it is considered part of the taxable sales amount.
- The department advises establishments to clearly differentiate between tips and service charges on receipts to avoid confusion.
Source: vitallaw.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
