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If the price increase is actually linked to higher wages for the staff, there should be no increase in taxable revenue for the restaurant, because the wages are
by NoboruWataya 1mo ago
If the price increase is actually linked to higher wages for the staff, there should be no increase in taxable revenue for the restaurant, because the wages are deductible expenses. But there is still the matter of sales tax (paid by the customer), and the tax payable by the employee on their wages (not sure if tips are technically taxable income already, but regardless, you can bet most staff aren't paying taxes on them).
- sgerenser 1mo agoThey used to be taxable income, but now thanks to Trump’s “no tax on tips” campaign promise they aren’t. Effectively nobody paid taxes on cash tips anyway, but nowadays cash tips are relatively rare and credit card tips definitely show up on paystubs/W2s.
- Scaled 1mo agoTrue about federal, but state level tax is sometimes done on gross receipts instead of profit.