Missouri House OKs excluding mandatory tips from sales tax
JEFFERSON CITY (AP) - Restaurant owners say the Department of Revenue has been trying to collect sales tax on mandatory tips for large groups of diners.
A measure addressing their concerns gained initial approval in the Missouri House on Tuesday.
The proposal specifies that automatically added tips when a group dining together is over a certain number are not subject to sales tax.
Republican Rep. Galen Higdon, of St. Joseph, says the state has been trying to collect sales tax on tips, which the department is not allowed to do.
The bill also includes a provision dealing with cash tips. Restaurant owners say the department is targeting them for failing to withhold income tax from cash tips servers do not report.
The measure faces another vote in the House before going to the Senate.