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Operations and Maryland

Julie Jargon, Wall Street Journal Gratuities Added for Larger Groups Will Be Taxed as Service Charges   An updated tax rule is causing restaurants to rethink the practice of adding automatic tips to the tabs of large parties. Starting in January, the Internal Revenue Service will begin classifying those automatic gratuities as service charges—which it treats as regular wages, subject to payroll tax withholding—instead of tips, which restaurants leave up to the employees to report as income. The change would mean more paperwork and added costs for the restaurants—...
Michelle Basch, WTOP Nearly a year and a half after Montgomery County's 5-cent bag tax took effect, a public hearing was held Tuesday night to consider possible tweaks. A bill being considered by the Montgomery County Council would scale back the tax so it only applies to food stores. A food store would be defined as any retail store where food makes up more than 2 percent of gross sales by dollar value. The bill would make takeout food bags exempt from the tax.   Read more: http://www.wtop.com/41/3362788/Exemptions-proposed-to-Montgomery-Countys-bag-tax  
When Is a Tip Just a Tip?                                                                                    Tipping in the hospitality industry is considered the normal course of business.  However, the IRS considers tipping, in certain situations, to be taxed differently through payroll.  Employers in this industry now need to be diligent in their recordkeeping.  ...

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