SALT Report 1750 – The Wyoming Department of Revenue issued guidance regarding the taxability of voluntary and mandatory gratuities. Voluntary gratuities, or tips, are given by a customer for services rendered. Generally, the gratuity is not placed on the bill the customer receives and there is no obligation for the customer to pay or leave a gratuity. This type of voluntary gratuity is not subject to sales tax because it is not part of the sales price of the item being purchased.
Mandatory gratuities are different, as they are not given at the discretion of the customer but, instead, are added to the customer’s bill. This charge is viewed as a component of the sales price because the customer is not given the option to pay the gratuity. Therefore, because the customer is not given the option to pay this charge, mandatory gratuities become part of the sales price of the item purchased and are subject to sales tax.
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