2746

LAWS OF MARYLAND

Ch. 776

CHAPTER 776

(House Bill 978)

AN ACT concerning

Sales Tax - Restaurant Service Charges

Sales and Use Taxes - Gratuity and Service Charges

FOR the purpose of excluding from the definition of "price",
for sales and use tax purposes, certain restaurant
charges gratuity or service charges on sales of food or
beverages for human consumption.

BY adding to

Article 81 - Revenue and Taxes

Section 324(i)(8) and 372(g)(8)

Annotated Code of Maryland

(1975 Replacement Volume and 1979 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That section(s) of the Annotated Code of Maryland
be repealed, amended, or enacted to read as follows:

Article 81 - Revenue and Taxes

324.

As used in this subtitle, the following terms shall
mean or include:

(i) "Price" means the aggregate value in money of any
thing or things paid or delivered, or promised to be paid or
delivered by a purchaser to a vendor in the consummation and
complete performance of a retail sale without any deduction
therefrom on account of the cost of the property sold, cost
of materials used, labor or service cost, or any other
expense whatsoever. "Price" does not include the following:

(8) AMOUNTS PAID BY ANY PURCHASER OF FOOD FOR
HUMAN CONSUMPTION AS A MANDATORY GRATUITY OR SERVICE CHARGE.

(8) THE AMOUNT PAID BY ANY PURCHASER OF FOOD OR
BEVERAGES FOR HUMAN CONSUMPTION ON THE PREMISES OF THE
VENDOR AS A MANDATORY GRATUITY OR SERVICE CHARGE IN THE
NATURE OF A TIP, UNLESS THE FOOD OR BEVERAGES ARE SERVED TO
A GROUP OF MORE THAN TEN PERSONS, IF THE MANDATORY GRATUITY
OR SERVICE CHARGE IS SEPARATELY STATED FROM THE
CONSIDERATION RECEIVED FOR THE FOOD OR BEVERAGES TRANSFERRED
IN THE RETAIL SALE.

372.