Restaurant charging higher sales tax?

August 6, 2018 11:32 PM

So I just went to a well known Italian restaurant in Kearny Mesa, San Diego and when I got the bill I noticed that they charged our table 9.15% sales tax. I looked up their address on the CA Department of Tax and Fee Administration and it said it should be at 7.75%, which was what most of our others areas is. Have you seen any other places like this? Why would this happen? Shady business practice?
posted by lain to Law & Government (15 answers total)

Not a tax expert, but might I suggest that the city or county might add a few per cents to the state tax? Also might be an "entertainment" tax. Hope someone who knows will post...
posted by Cranberry at 12:31 AM on August 7, 2018 [4 favorites]

How many people were in your party? That can sometimes impact things IME. Restaurants will put, "Parties of 5 or more will automatically have X% gratuity added to their bill." This seems to happen at independent fine dining places (and some diners).
posted by Hermione Granger at 1:08 AM on August 7, 2018

Was there any live music or anything that could be perceived as "entertainment" going on anywhere in the restaurant? It is possible that, due to some clever sleight of (tax) hand, the restaurant charged you an entertainment tax instead of the standard sales tax.

My husband and I went to a Sunday brunch at a restaurant on the Las Vegas strip a few years ago. Food was excellent, and in the background was a jazz trio performing. It was background music--no round of applause at the end of each number.

When the bill came, my husband noticed that the tax added was substantially steeper than the regular sales tax--and when we asked the server, she said that it was because we were attending a music performance with food, not the other way around.
posted by Quaversalis at 1:10 AM on August 7, 2018

I do know restaurants who would slightly overcharge tax and keep the extra until the government did a huge crackdown.
posted by jeather at 3:18 AM on August 7, 2018

Might there be a meals tax? Since it's considered an excise, it's usually on top of whatever the regular sales tax is, but gets reported as a single line item.
posted by basalganglia at 3:32 AM on August 7, 2018 [2 favorites]

After cursory internet research, it appears that food tax in California is miserably confusing.
posted by kuanes at 4:14 AM on August 7, 2018

Some parts of California have voter-approved surcharges for temporary periods. But there's nothing like that in effect in San Diego that I can find, or even something that was in effect and has expired. So it sure looks like they are overcharging, wittingly or not.
posted by beagle at 6:00 AM on August 7, 2018

Did the receipt say 9.15% tax charged or was that a figure you calculated? If the former, they probably just messed something up in their sales tax software; if the latter, it could be a software issue or maybe you miscalculated. Either way, you can contact them and ask. Any money collected as sales tax is held in trust for the state (with very stiff penalties for collecting but not remitting the tax), so if it's an intentional scam, it's a stupid one.
posted by melissasaurus at 6:07 AM on August 7, 2018

Response by poster: I should have mentioned we did have a large party of 16 people but they added an 18% gratuity to our bill. No live music. We calculated the tax multiple times and we brought it up to the staff and they all said they don’t know.
posted by lain at 7:29 AM on August 7, 2018

Did they maybe charge tax on the gratuity? If it was added to the bill, it might be considered part of the total before taxes by their computer.
posted by sexyrobot at 7:42 AM on August 7, 2018 [3 favorites]

9.15/7.75 = 1.18, so it could in fact be that they charged tax on your gratuity.
posted by jeather at 7:50 AM on August 7, 2018 [3 favorites]

Response by poster: They charged gratuity on top of tax. Might as well give the breakdown on the receipt:

Subtotal: 581.40 / Tax: 53.17 / Gratuity: 104.65 / Total: 739.22
posted by lain at 7:57 AM on August 7, 2018

Best answer: In California, optional gratuities are not included in the taxable price, while mandatory gratuities are. Tax of 51.37 on a total of (581.40+104.65) is roughly 7.75%.
posted by melissasaurus at 8:00 AM on August 7, 2018 [29 favorites]

(686.05) * .0775 = 53.168875
686.05 is your subtotal plus gratuity, so they taxed your mandatory gratuity.
posted by soelo at 8:54 AM on August 7, 2018 [5 favorites]

In one calculation: 686.05 * 1.0775 = 739.218875
posted by Krawczak at 2:15 PM on August 7, 2018