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Maryland Sales Tax on Tips


Maryland Senate Bill 852, effective July 1, 2012 imposes a sales and use tax on “…a mandatory gratuity or service charge in the nature of a tip for serving food or any type of beverage to a group of more than 10 individuals….” The sales and use tax rate is 6%.

The sales and use tax rate for the taxable price of an alcoholic beverage is 9%.

NOTE: Bars and restaurants both pose special challenges for auditors. Read about the Undercover Pour Test on the Audit blog at salestaxsupport and learn more!

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Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”