Comptroller of Maryland. Serving the People. Peter Franchot, Comptroller
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Mandatory Gratuities and Service Charges

Payment of a separately stated mandatory gratuity or service charge, which is in the nature of a tip, is not subject to the tax if the food or beverages are served to a group of ten persons or less. However, mandatory gratuity or service charges on sales of food or beverages to a group of more than ten persons are taxable whether or not they are separately stated.

Coupons and menu club tickets that are in the nature of discounts are not a part of the taxable price; however, if the vendor can obtain reimbursement from a third party for the coupon or ticket, it is part of the sales price and, therefore, subject to the tax.

Links for Sales of Food
Business Tax Types
Sales and Use Tax
Tax Information
Special Situations
Sales of Food
  Food and Beverages FAQs
  Taxable Items at Special Events
  Vendor Sales of Food at Public Markets
  Taxes on Disposable Paper Products
  Mandatory Gratuities and Service Charges
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