REGULATIONS - PRIVILEGE AND EXCISE TAXES

Reg. ___-455.1. Gratuities related to restaurant activity.

Gratuities charged by or collected by persons subject to the tax imposed by Section ___-455 may be excluded from gross income if:

(1) such charge is separately stated upon the bill, invoice, etc. provided the customer, and such amounts are maintained separately in the books and records of the taxpayer; and

(2) such gratuities are distributed in total to employees of the taxpayer in addition to customary and regular wages.